Abstract. In this study, the optimality of cash conversion cycles of firms at foodbeverage index of BIST (Istanbul Stock Market) is investigated. Panel KSS unit root test developed by Uçar and Omay (2009), which is suitable for heterogeneous panels & for non-linear financial series and taking into account cross sectional dependence, is used in study with quarterly data spanning the period 2008-2013. Cash levels of 13 firms among 15 are observed non-optimal by the aid of Sequential Panel Selection Method (SPSM) developed by Chortareas and Kapetanios (2009). This results show most firms at food-beverage index do not pursue a balanced working capital policy.

Keywords: Cash Conversion Cycles, Non-Linear Panel Unit Root Test, Sequential Panel Selection Method, Food and Beverage Sector, Turkey.