The Effect of Turnover Ratios on Cash Flow Risk: An Application in Manufacturing Industry

Abstract

Purpose – The concept of cash flow risk is used together with the concepts of cash volatility or cash uncertainty in the literature. In this study, it was tried to determine whether activity ratios or turnover ratios have an effect on cash flow risk.
Design/methodology/approach – In the study, 20 quarters of 620 observations/year data belonging to 31 companies operating in the Metal-Goods (Manufacturing) group for the periods of 2019-3 / 2023-12 were examined, and the panel data analysis method was used in the analysis of the data.
Results – In the study, positive significant relationships were determined between receivables turnover and fixed asset turnover and cash flow risk, and it was determined that there was no statistically significant relationship between inventory turnover and cash flow risk.
Discussion – Increases in receivables turnover and fixed asset turnover increase the cash flow risk of enterprises, that is, cash flow uncertainty. Inventory turnover has no effect on cash flow risk.