| Summary: | The Working Capital Management should be carried out as efficiently as possible in order to maximize value creation for the various stakeholders. This relationship between efficiency and profitability has been examined by several authors who have attempted to establish this relationship through the analysis of three elements: current financial management policies, size and industry. The purpose of this study is to examine empirically the specific relationship between profitability and efficiency of working capital management in the worldwide telecommunication services industry. The sample consists of 48 companies classified by Reuters® as Integrated Telecommunication Operators, resulting in 488 firm-year observations for the period 1998-2009. Through the analysis of descriptive statistics, Pearson correlation and of the regressions performed by the Fixed Effects Model, it is possible to conclude that the Net Trade Cycle is a better measure of efficiency of Working Capital Management in the telecommunication industry, when compared with the Cash Conversion Cycle. Another conclusion is that increasing the Net Trade Cycle represents an enhance of profitability of the telecom operators. This increase at the Net Trade Cycle level can be generated by reducing the number of days sales of accounts payable. Overall, the telecommunication services companies may be facing some needs for investment at the Working Capital level.
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