The Effect of Working Capital Level and Liquidity on Profitability of the Companies Listed In Tehran Stock Exchange

The purpose of this study was to evaluate the effect of working capital level and liquidity on the profitability of the companies listed in Tehran Stock Exchange. To this end, a total of 84 companies were chosen during 2003-2010.CGS is used in this study as the working capital index and current ratio is used as an indicator of liquidity and the impact of liquidity and the amount of working capital on the profitability was studied in 1 main hypothesis and 2 secondary hypotheses. To test the hypotheses, multiple regression was used. Results show that the amount of working capital and liquidity affect the profitability of firms in different industries, and these results are fixed in the timeframe being investigated.