Importance of Working Capital Management and Its Components for Firm Profitability

Kód výsledku v 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>

Nalezeny alternativní kódy

RIV/60460709:41110/23:94653

Výsledek na webu

<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>

Jazyk výsledku

angličtina

Název v původním jazyce

Importance of Working Capital Management and Its Components for Firm Profitability

Popis výsledku v původním jazyce

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&apos;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&apos;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.

Název v anglickém jazyce

Importance of Working Capital Management and Its Components for Firm Profitability

Popis výsledku anglicky

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&apos;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&apos;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.

Druh

J_imp - Článek v periodiku v databázi Web of Science

CEP obor

—

OECD FORD obor

50201 - Economic Theory

Projekt

—

Návaznosti

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Rok uplatnění

2023

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

Prague Economic Papers

ISSN

1210-0455

e-ISSN

2336-730X

Svazek periodika

32

Číslo periodika v rámci svazku

4

Stát vydavatele periodika

CZ - Česká republika

Počet stran výsledku

22

Strana od-do

367-388

Kód UT WoS článku

001056830100002

EID výsledku v databázi Scopus

2-s2.0-85169811606