The Relation between Financial Facilities and Payables Turnover Period with Emphasize on Financial Leverage Index

Capital structure and trade credit are basically the two important issues in modern theory. The need for financing is because of: The value for capital of companies decreases under the influence of outside causes like the exchange rates, inflation, rate of interest, and, Operational mechanisms of companies make the need for financial resources to be felt. Firms try to finance in many ways, one of which is obtaining trade credit from sellers in the form of accounts payable lowers financing costs; but regarding causes such as Window Dressing , the low level of rate of interest in some countries, debt collection for maintaining their credit in front of sellers, start to look for bank facilities. The aim of this study is to investigate the benefits of financing facilities in decreasing the Payable Turnover Period and its reflection on Financial Leverage Index. The numbers of statistical community are 458 companies in TSE. We select 202 companies from these statistic communities during 2005-2010.The results of hypothesis testing by using regression model showed that financial facilities affect the payable turnover period, and that there was no meaningful relationship between Accounts Payable Turnover Period and Financial Leverage Index.