The Efficiency of Working Capital Management and its Impact on the Profitability of Small, Medium and Large Enterprises of the Food Industry in Poland
Abstract
The article presents the results of the efficiency of working capital management in small, medium and large enterprises of the food industry in Poland years in 2005-2009. The efficiency of working capital management has been evaluated by using the in-ventory cycle, receivables, liabilities and cash conversion cycle and by its relation to rate of return on non-financial assets. Studies have shown that the effectiveness of working capital was differentiated by size of enterprises and in industries where working capital cycles are the shortest, a relatively higher rate of return on assets was achieved. In the national food industry the highest efficiency, measured by cash conversion cycle and assets profitability, was characteristic for large companies. The beneficial effect of shortening the cycle of working capital on the profitability of assets also verified the regression analysis.
Keywords
Working capital; Profitability; Return on assets (ROA); Inventories; Receivables
References
Dong H.P., Su J., 2010. The relationship between working capital management and profitability: a Vietnam case. Int. Res. J. Financ. Econ. 49, 59-67.
F0-2, statystyczne sprawozdanie finansowe, produkcja artykułów spożywczych, produkcja napojów. Niepublikowane dane GUS 2011. GUS, Warszawa.
Gill A., Biger N., Mathur N., 2010. The relationship between working capital management and profitability: evidence from The United States. Bus. Econ. J. 10, 1-9.
Lazaridis J., Tryfonidis D., 2006. Relationship between working capital management and profitability of listed companies in the Athens stock exchange. J. Financ. Manage. Anal. 19 (1), 26-35.
Lyroudi K., Lazaridis J., 2000. The cash conversion cycle and liquidity analysis of the food industry in Greece. Social Science Research Network. http://papers.ssrn.com [dostęp: 6.06.2011].
Mohamad N.E.A., Saad N.B.M., 2010. Working capital management: The effect of market valuation and profitability in Malaysia. Int. J. Bus. Manage. 5 (11), 140-147.
Nabone H., Abdullatif M., Al Hajjar M., 2010. Cash conversion cycle and firm's performance of Japanese firms. Social Science Research Network.
http://papers.ssrn.com [dostęp: 6.06.2011].
Padachi K., 2006. Trends in working capital management and its impact on firms' performance: An analysis of Mauritian small manufacturing firms. Int. Rev. Bus. Res. Pap. 2, 45-58.
Polska Klasyfikacja Działalności - PKD: Załącznik do Rozporządzenia Rady Ministrów z 24.12. 2007. 2007. Dz. U. 251, poz. 1885. GUS, Warszawa. http://www.stat.gov.pl/ [dostęp: 6.06.2011].
Raheman A., Nasr M., 2007. Working capital management and profitability - Case of Pakistani firms. Int. Rev. Bus. Res. Pap. 3 (1), 279-300.
Ramachandran A., Janakiraman M., 2009. The Relationship between working capital management efficiency and EBIT. Manag. Glob. Transit. 7 (1), 61-74.
Richards V.D., Laughlin E.J., 1980. A cash conversion cycle approach to liquidity analysis. Financ. Manage. 9, 32-38.
Shin H.H., Soenen L., 1998. Efficiency of working capital management and corporate profitability. Financ. Pract. Educ. 8 (2), 37-45.
Sierpińska M., Jachna T., 2004. Ocena przedsiębiorstwa według standardów światowych. PWN, Warszawa.
Wędzki D., 2009. Analiza wskaźnikowa sprawozdania finansowego. T. 2. Wskaźniki finansowe. Oficyna Ekonomiczna, Kraków.
Uniwersytet Przyrodniczy w Poznaniu Poland
Uniwersytet Przyrodniczy w Poznaniu Poland
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
This journal permits and encourages authors to post items submitted to the journal on personal websites or institutional repositories both prior to and after publication, while providing bibliographic details that credit, if applicable, its publication in this journal.
Most read articles by the same author(s)
- Zbigniew Gołaś, Magdalena Kozera, Strategies of Labour Productivity in Agricultural Farms , Journal of Agribusiness and Rural Development: Vol 7 No 1 (2008)
- Anna Bieniasz, Zbigniew Gołaś, Factors Shaping the Level of the Financial Liquidity of Enterprises , Journal of Agribusiness and Rural Development: Vol 8 No 2 (2008)
- Anna Bieniasz, Zbigniew Gołaś, Sector Diversifying the Financial Liquidity of Enterprises in Poland , Journal of Agribusiness and Rural Development: Vol 8 No 2 (2008)
- Anna Bieniasz, Dorota Czerwińska-Kayzer, Zbigniew Gołaś, Analysis of Enterprise Profitability with Application of Method of Diversifying , Journal of Agribusiness and Rural Development: Vol 9 No 3 (2008)
- Anna Bieniasz, Zbigniew Gołaś, Factors Shaping the Financial Liquidity of Farms , Journal of Agribusiness and Rural Development: Vol 9 No 3 (2008)
- Anna Bieniasz, Zbigniew Gołaś, Financial Liquidity of Farms in the European Union , Journal of Agribusiness and Rural Development: Vol 9 No 3 (2008)
- Zbigniew Gołaś, Magdalena Kozera, Selected Aspects of Market Adaptations of the Pig Sector in Poland , Journal of Agribusiness and Rural Development: Vol 9 No 3 (2008)
- Zbigniew Gołaś, Anna Witczyk, Analysis of Enterprise Financial Liquidity on the Example of the Confectioner's Trade , Journal of Agribusiness and Rural Development: Vol 14 No 4 (2009)
- Anna Bieniasz, Zbigniew Gołaś, The Substance and Diversification of the Financial Liquidity of Farms , Journal of Agribusiness and Rural Development: Vol 5 No 377 (2006): Roczniki Akademii Rolniczej w Poznaniu - Seria Ekonomia
- Anna Bieniasz, Zbgigniew Gołaś, The Diversification of the Financial Standing of Farms According to Cash Flows Directions , Journal of Agribusiness and Rural Development: Vol 5 No 377 (2006): Roczniki Akademii Rolniczej w Poznaniu - Seria Ekonomia
