Importance of Working Capital Management and Its Components for Firm Profitability
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216208%3A11230%2F23%3A10470364" target="_blank" >RIV/00216208:11230/23:10470364 - isvavai.cz</a>
Alternative codes found
RIV/60460709:41110/23:94653
Result on the web
<a href="https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=Ak2ErzJ.7y" target="_blank" >https://verso.is.cuni.cz/pub/verso.fpl?fname=obd_publikace_handle&handle=Ak2ErzJ.7y</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.18267/j.pep.835" target="_blank" >10.18267/j.pep.835</a>
Alternative languages
Result language
angličtina
Original language name
Importance of Working Capital Management and Its Components for Firm Profitability
Original language description
The current situation of slower economic growth is leading to a more difficult access to funds and unpredictable payment behaviour of customers, which predetermines growing importance of working capital management. The aim of the present article is to examine the effects of working capital investment and its components (inventories, accounts receivable, accounts payable and cash) on the firm's performance in the case of non-cyclical and cyclical industries in the Czech Republic. The underlying dataset comprises corporate data of 293 firms from 2010 to 2018. The calculations reveal that both industries applied over the period a very similar conservative working capital management strategy consisting in increasing working capital investment accompanied by simultaneous development of all its components. The results also indicate dissimilarities in the importance of working capital components with respect to the firm's performance. Cash seems to be the most important component, contrary to inventories, which are insignificant jointly for both industries. Accounts receivable and accounts payable are significant only for cyclical industry firms.
Czech name
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Czech description
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Classification
Type
J<sub>imp</sub> - Article in a specialist periodical, which is included in the Web of Science database
CEP classification
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OECD FORD branch
50201 - Economic Theory
Result continuities
Project
—
Continuities
I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace
Others
Publication year
2023
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Data specific for result type
Name of the periodical
Prague Economic Papers
ISSN
1210-0455
e-ISSN
2336-730X
Volume of the periodical
32
Issue of the periodical within the volume
4
Country of publishing house
CZ - CZECH REPUBLIC
Number of pages
22
Pages from-to
367-388
UT code for WoS article
001056830100002
EID of the result in the Scopus database
2-s2.0-85169811606