{"title":"The Relationship between Working Capital and Profitability of Companies Operating in the Food Industry in the Czech Republic","authors":"Markéta Šeligová, Ivana Koštuříková","doi":"10.7160/aol.2022.140308","DOIUrl":null,"url":null,"abstract":"The aim of this article is to determine the relationship between working capital and profitability of companies operating in the food industry in the Czech Republic and then find out how working capital affects the profitability of these companies from 2009 to 2019. In the first part of the research we estimate the links between working capital measured by variables such as cash conversion cycle, current assets ratio, current liabilities ratio, working capital ratio and corporate profitability measured by return on sales. In the next part of the research, we estimate the effect of working capital measured by variables such as cash conversion cycle, current assets ratio, current liabilities ratio, working capital ratio on corporate profitability measured by return on sales. Correlation analysis and the GMM method will be used to determine the relationship between working capital and the profitability of companies and how working capital affects the profitability of these companies. The results of the correlation analysis showed statistically significant links between return on sales and variables such as cash conversion cycle, current assets ratio, current liabilities ratio and working capital ratio. The results of the GMM method showed a statistically significant effect of variables such as cash conversion cycle, current assets ratio, current liabilities ratio and working capital ratio on the profitability of companies measured by the return on sales indicator. All mitigated effects have been demonstrated for companies operating in the food industry as a whole, as well as in the production of food products and beverages.","PeriodicalId":38587,"journal":{"name":"Agris On-line Papers in Economics and Informatics","volume":" ","pages":""},"PeriodicalIF":0.0000,"publicationDate":"2022-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Agris On-line Papers in Economics and Informatics","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.7160/aol.2022.140308","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"Economics, Econometrics and Finance","Score":null,"Total":0}
引用次数: 1
Abstract
The aim of this article is to determine the relationship between working capital and profitability of companies operating in the food industry in the Czech Republic and then find out how working capital affects the profitability of these companies from 2009 to 2019. In the first part of the research we estimate the links between working capital measured by variables such as cash conversion cycle, current assets ratio, current liabilities ratio, working capital ratio and corporate profitability measured by return on sales. In the next part of the research, we estimate the effect of working capital measured by variables such as cash conversion cycle, current assets ratio, current liabilities ratio, working capital ratio on corporate profitability measured by return on sales. Correlation analysis and the GMM method will be used to determine the relationship between working capital and the profitability of companies and how working capital affects the profitability of these companies. The results of the correlation analysis showed statistically significant links between return on sales and variables such as cash conversion cycle, current assets ratio, current liabilities ratio and working capital ratio. The results of the GMM method showed a statistically significant effect of variables such as cash conversion cycle, current assets ratio, current liabilities ratio and working capital ratio on the profitability of companies measured by the return on sales indicator. All mitigated effects have been demonstrated for companies operating in the food industry as a whole, as well as in the production of food products and beverages.
期刊介绍：
The international journal AGRIS on-line Papers in Economics and Informatics is a scholarly open access, blind peer-reviewed by two reviewers, interdisciplinary, and fully refereed scientific journal. The journal is published quarterly on March 30, June 30, September 30 and December 30 of the current year by the Faculty of Economics and Management, Czech University of Life Sciences Prague. AGRIS on-line Papers in Economics and Informatics covers all areas of agriculture and rural development: -agricultural economics -agribusiness -agricultural policy and finance -agricultural management -agriculture''s contribution to rural development -information and communication technologies -information and database systems -e-business and internet marketing -ICT in environment -GIS, spatial analysis and landscape planning The journal provides a leading forum for an interaction and research on the above-mentioned topics of interest. The journal serves as a valuable resource for academics, policy makers and managers seeking up-to-date research on all areas of the subject. The journal prefers scientific papers by international teams of authors who deal with problems concerning the focus of our journal in the world-wide scope with relation to Europe.
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