Açıkgöz, Ali FarukApak, SudiApergis, NicholasUzunoğlu, Sadi2022-05-112022-05-1120181985-25172042-5856https://doi.org/10.1108/JFRA-01-2017-0001https://hdl.handle.net/20.500.11776/10491Purpose This paper aims to focus on the absence of a direct criterion for the ideal level of net working capital (NWC) for which Acikgoz (2014) theoretically demonstrates that this NWC can be treated in a manner that allows the assessment of repayments. The study presents and discusses a new multiplier (i.e. the afa coefficient), defined as the ratio of cash equivalents ratio to NWC, measured as the percentage of short-term liabilities (Acikgoz, 2014). In other words, the study explores whether NWC could be an indicator of the ratios of corporate short-term bank credit to STL and of bank credit to total assets. Design/methodology/approach Sectoral panel regressions are used in the case of Turkey, spanning the period 1996-2013, on data obtained from the Central Bank of Turkey. Through second-generation panel unit root tests for cross-section dependence and panel cointegration methodologies, the results illustrate the statistical significance of the CD statistics, indicating the presence of cross dependence, the presence of non-stationary variables and the presence of a long-run association for the variables under study. Findings The findings document that a transformed variable of NWC is more substantive than the explicatory quality of the current ratio and may potentially be used in the prediction of bank credit in corporate liabilities. Originality/value The afa coefficient shows the ratio of liquid assets to NWC as a percentage of STL. The results illustrate that this coefficient plays a significant role for corporate bank credit usage in the case of the Turkish sectoral analysis.en10.1108/JFRA-01-2017-0001info:eu-repo/semantics/closedAccessBank creditafa coefficientCorporate liquidityNet working capitalMedium-Sized EnterprisesEmpirical-AnalysisFinancial RatiosCash-FlowDeterminantsCostsTestsModelFirmsLinesArticle162274291N/AWOS:0004329333000012-s2.0-85061910325Q2