In today’s business environment, where global competition is steadily intensifying, firms must focus not only on their long-term investments but also on the management of their short-term assets and liabilities in order to ensure sustainability and growth. At this juncture, the concept of working capital plays a critical role in enabling firms to carry out their daily operations effectively. Proper management of working capital regulates cash flows, allows firms to meet short-term obligations, ensures the continuity of operational activities, and contributes to enhancing profitability.

Working capital management is not merely a technical process of balancing financial resources; it also lies at the core of a firm’s strategic decision-making mechanisms. Effective management of capital provides firms with opportunities to mitigate liquidity risks, strengthen competitiveness, and increase market value. Therefore, a detailed examination of the conceptual framework, characteristics, and management practices of working capital emerges as a fundamental requirement for firms’ financial health and long-term success.

This study investigates the impact of working capital management on firm profitability by focusing on companies listed on Borsa Istanbul (BIST). Employing the Bhattacharya Index, the analysis evaluates financial data to determine the direction and strength of the relationship between working capital and profitability. In this way, the study assesses how this relationship—previously yielding mixed results in the literature—takes shape within the context of Turkish capital markets through the perspective of the Bhattacharya Index.

The research presents a comprehensive examination through both a review of the theoretical literature and empirical findings. Accordingly, the study not only contributes to academic discourse but also provides valuable insights for practitioners, investors, and policymakers. Highlighting the critical role of working capital management in firm performance, the research aims to offer findings that can inform firms’ strategic financial decisions. Within this framework, the subsequent sections of the study first discuss the conceptual foundations of working capital and relevant approaches in the literature, then present the empirical analysis conducted on Borsa Istanbul firms, and finally evaluate and discuss the findings in light of the overall results.