Unique and only research based on all sectors in Turkey

Unique and only research based on all sectors in Turkey

Working Capital Management Cash asset is one of the most ımportant principles on the balance sheet. A successful asset management may generate a systematical growth with lower debts while an unsuccessful asset management may cause to bankruptcy as result of financial depressions. We analyze the working capital in this particular research. We analyzed; cash flow, share of cash flow in total sales, changes in balance sheets, cash cycle, inventory turnover, receivables collection periods and trade payables payment periods based on balance sheets and income statements of 36 sectors, which is announced by the Central Bank of Turkey. In particular, small and medium-sized businesses must manage and use their assets in the most effective way in today's competitive economic environment. The cash management becomes more important among the inflationary economies and the time value of money. Companies should decrease the funds and loans depend on their short term assets to keep the maximum amount of cash in. Beside of creating new sources, increasing the profit margin must be most important principle of the cash management for small and medium-sized businesses. Accordingly, we serve to our client with our experienced team in corporate finance and advise them for a successful management of the cash flow to ensure the consistency in the working capital. BESFİN FINANCIAL SERVICES CO. Ferda BESLİ ferda.besli@besfin.com Avrupa Residence Karayolları Mh. Abdi İpekçi Cad. No:30 27th Floor Küçükköy Gaziosmanpaşa İstanbul Phone: +90 212 609 83 50 Fax: +90 212 609 8349 Ece TAŞTAN ece.tastan@besfin.com Avrupa Residence Karayolları Mh. Abdi İpekçi Cad. No:30 27th Floor Küçükköy Gaziosmanpaşa İstanbul Phone: +90 212 609 83 50 Fax: +90 212 609 8349 Esra Atıcı esra.atici@besfin.com Avrupa Residence Karayolları Mh. Abdi İpekçi Cad. No:30 27th Floor Küçükköy Gaziosmanpaşa İstanbul Phone: +90 212 609 83 50 Fax: +90 212 609 8349 2

Summary of Working Capital Management Manufacturing Industry: Manufacturing Industry: In 2009, the decreasing sales turnovers in the manufacturing industry brought out a decrease in the Net Working Capital needs. In the post-crisis term, the consistent increase in the operating cycles effected the Net Working Capital needs in the negative ways. Food Manufacturing: The Net Working Capital needs of the sector is a bit heavy as it has a massive sector volume in the industry. The sector requires the twenty-eighth percent of its sales turnover for the Net Working Capital. It is a sector that has a big potential of growth but the debts in the sector is high because of the increasing needs of Net Working Capital while the companies grow. Chemical Products Manufacturing: The sector has an important volume in the industry. It also requires a high percentage of Net Working Capital needs with the 30% of its sales. The sector exposes a decrease in the debt paying periods in the years 2011 and 2012 as it truly gives rise to an increase of 20 days in the cash turnover periods. Textiles: It is one of the major sector in the manufacturing industry of Turkey. Textile sector is also another one that requires a massive amounts of the Net Working Capital. The sector has different rates in its sub-sectors for the Net Working Capital needs changing between 20% to 50% and this makes the loan needs of sector to increase. Textile products manufacturing requires 41% while the apparels manufacturing requires 23% Net Working Capital and it is 46% in the leather products manufacturing. The debts generate 50% of the assets in the sector, and the sector finance 30% of its assets with short/long term loans. Retail Sector: The sector has an increasing trend in the last decade. The working capital has a consistent accrual in the last years. The debt turnover period gets lower as the sector works with the short time periods in the collection of receivables. Accordingly, the share of Net Working Capital in the sales gets larger as the cash cycle extends in the sector. 3

Table of Contents A. ALL SECTORS 1. Agriculture, Forestry and Fisheries 2. Mining 3. Manufacturing Industry 4. Manufacture of Food Products 5. Beverage Manufacturing 6. Textiles 7. Clothing Articles 8. Leather Products 9. Wood Products 10.Paper and Paper Products 11.Media 12.Coal and Refined Petroleum Products 13.Chemistry 14.Manufacture of Pharmaceutical Products 15.Rubber and Plastic 16.Manufacture of Basic Metals 17.Fabricated Metal Products 18.Electronic and Optical Products 19. Electrical Equipment 20. Vehicles and trailers 21. Furniture 22. Machinery and Equipment Setup 23. Electricity and Gas Production and Distribution 24. Water, Sewerage and Waste Management 25. Construction 26. Building Construction 27. Building Exterior Building Construction 28. Spare parts 29. Wholesaling 30. Retail 31. Transportation and Warehousing 32. Accommodation and Food Services 33. Information 34. Real estate 35. Education 36. Health 4

All Sectors Net Working Capital increases from 127 billion TL to 214 billion TL when we analyze the all sectors, and this makes the working capital more important in the company management. In 2008, Cash Turnover increases from 64 days to 76 days out of the all sectors while the Building Construction sector leads it with the increase from 224 days to 367 days. The share of Capital Management in the total sales increases from 19% to 21%, and this particular increase is an important indicator that highlights the importance of cash flow in the company management. Comparison between the years 2008 and 2012 shows that the current assets increase from 386,6 billion TL to 533 billion TL while the fixed assets increase from 352 billion TL to 482 billion TL. 5

Agriculture, Forestry and Fisheries Working Capital Metrics 6

Mining Working Capital Metrics 7

Manufacturing Industry Working Capital Metrics 8

Manufacture of Food Products Working Capital Metrics 9

Beverage Manufacturing Working Capital Metrics 10

Textiles Working Capital Metrics 11

Clothing Articles Working Capital Metrics 12

Leather Products Working Capital Metrics 13

Wood Products Working Capital Metrics 14

Paper and Paper Products Working Capital Metrics 15

Media Working Capital Metrics 16

Coal and Refined Petroleum Working Capital Metrics 17

Chemistry Working Capital Metrics 18

Pharmaceutical Products Working Capital Metrics 19

Rubber and Plastic Working Capital Metrics 20

Manufacture of Basic Metals Working Capital Metrics 21

Fabricated Metal Products Working Capital Metrics 22

Electronic and Optical Products Working Capital Metrics 23

Electrical Equipment Working Capital Metrics 24

Vehicles and Trailers Working Capital Metrics 25

Furniture Working Capital Metrics 26

Machinery and Equipment Setup Working Capital Metrics 27

Electricity and Gas Production Working Capital Metrics 28

Water, Sewerage and Waste Management Working Capital Metrics 29

Construction Working Capital Metrics 30

Building Construction Working Capital Metrics 31

Building Exterior Construction Working Capital Metrics 32

Spare Parts Working Capital Metrics 33

Wholesaling Working Capital Metrics 34

Retail Working Capital Metrics 35

Transportation and Warehousing Working Capital Metrics 36

Accomodation and Food Services Working Capital Metrics 37

Information Working Capital Metrics 38

Real Estate Working Capital Metrics 39

Education Sector Working Capital Metrics 40

Health Industry Working Capital Metrics 41

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