Acta Univ. Agric. Silvic. Mendelianae Brun. 2015, 63(1), 263-270 | DOI: 10.11118/actaun201563010263

Influence of Components of Net Working Capital on Costs of Companies Manufacturing Machinery and Equipment in the Czech Republic

Zdeněk Motlíček, Pavlína Matějová, Dana Martinovičová
Department of Business Economics, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic

The approach to working capital management significantly affects the performance of companies. Nevertheless, this effect varies depending on the observed industry and company's size and it may be assumed that it is also dependent on territory differences. The paper presents an empirical research aiming to identify particular links between net working capital and costs of the company. The outcomes indicate a relatively strong positive correlation between the variables, especially in case of inventory. Furthermore he ratio of financial costs to ordinary costs is low, as well as the impact of net working capital components on financial costs. It follows that a focus on collection period would not lead to significant savings. The findings appropriately complement Czech and foreign literature focused more on impact of net working capital or working capital on profitability indicators. Further studies concerning a more detailed analysis of the influence of net working capital on corporate costs are difficult to be found. The present research has been conducted on medium-sized companies located in the Czech Republic and manufacturing machinery and equipment. The obtained results suggest the most suitable area of focus for optimization of working capital in relation to costs for the types of companies defined above.

Keywords: working capital, net working capital, ordinary cost, directs cost, financial cost, inventory, receivables, short-term financial assets, short-term liabilities
Grants and funding:

This paper was supported by Grant Agency of the Faculty of Business and Economics, Mendel University in Brno [No. 43/2014].

Prepublished online: March 14, 2015; Published: April 1, 2015  Show citation

ACS AIP APA ASA Harvard Chicago IEEE ISO690 MLA NLM Turabian Vancouver
Motlíček, Z., Matějová, P., & Martinovičová, D. (2015). Influence of Components of Net Working Capital on Costs of Companies Manufacturing Machinery and Equipment in the Czech Republic. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 63(1), 263-270. doi: 10.11118/actaun201563010263
Share...
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. AL-NAJJAR, B. 2013. The financial determinants of corporate cash holdings: Evidence from some emerging markets. International Business Review, 22(1): 77-88. Web of science. [online]. Available at: http://linkinghub.elsevier.com/retrieve/pii/S096959311200011X. [accessed 22 November 2013]. DOI: 10.1016/j.ibusrev.2012.02.004 Go to original source...
    2. BAÑOS-CABALLERO, S., GARCÍA-TERUEL, P. J. and MARTÍNEZ-SOLANO, P. 2014. Working capital management, corporate performance, and financial constraints. Journal of Business Research, 67(3): 332-338. DOI: 10.1016/j.jbusres.2013.01.016 Go to original source...
    3. BEI, Z. and WIJEWARDANA, W. P. 2012. Working capital policy practice: Evidence from Sri Lankan companies. Procedia - Social and Behavioral Sciences, 40: 695-700. Web of science. [online]. Available at: http://linkinghub.elsevier.com/retrieve/pii/S1877042812007185. [accessed 17 March 2014]. DOI: 10.1016/j.sbspro.2012.03.251 Go to original source...
    4. BELLOUMA, M. 2011. Effects of capital investment on working capital management: Evidence on Tunisian export small and medium enterprises (SMEs). African journal of business management, 5(30). Web of science. [online]. Available at: http://www.academicjournals.org/ajbm/abstracts/abstracts/abstracts2011/30Nov/Bellouma.htm [accessed 4 November 2013]. Go to original source...
    5. BIGELLI, M. and SÁNCHEZ-VIDAL, J. 2012. Cash holdings in private firms. Journal of Banking, 36(1): 26-35. Web of science. [online]. Available at: http://linkinghub.elsevier.com/retrieve/pii/S0378426611001932. [accessed 22 November 2013]. DOI: 10.1016/j.jbankfin.2011.06.004 Go to original source...
    6. FILBECK, G. and KRUEGER, T. 2005. Industry Related Differences in Working Capital management. Mid-American Journal of Business, 20(2): 11-18. DOI: 10.1108/19355181200500007 Go to original source...
    7. GUJARATI, D. N. and PORTER, D. C. 2009. Basic econometrics. 5th ed. Boston: McGraw-Hill international editions.
    8. HILL, M. D., KELLY, G. W. and HIGHFIELD, M. J. 2010. Net Operating Working Capital Behavior: A First Look. Financial Management (Wiley-Blackwell), 39(2): 783-805. Web of science. [online]. Available at: http://www.ciitlahore.edu.pk/Papers/Abstracts/146-8588087898110945808.pdf. [accessed 19 November 2013]. DOI: 10.1111/j.1755-053X.2010.01092.x Go to original source...
    9. KISLINGEROVÁ, E. and HNILICA, J. 2008. Finanční analýza: krok za krokem. 2nd Edition. Praha: C. H. Beck.
    10. KISLINGEROVÁ, E. 2010. Manažerské finance. 3th Edition. Praha: C. H. Beck.
    11. LIND, L., PIRTTILÄ, M., VISKARI, S., SCHUPP, F. and KÄRRI, T. 2012. Working capital management in the automotive industry: Financial value chain analysis. Journal of Purchasing and Supply Management, 18(2): 92-100. Web of science. [online]. Available at: http://linkinghub.elsevier.com/retrieve/pii/S1478409212000222. DOI: 10.1016/j.pursup.2012.04.003 Go to original source...
    12. NAZIR, M. S. and AFZA, T. 2009. A Panel Data Analysis of Working Capital Management Policies. IBA Business Review, 4(1): 143-157. Standard: 1990-6587. [online]. Available at: http://www.ciitlahore.edu.pk/Papers/Abstracts/146-8588087898110945808.pdf. [accessed 17 March 2014]. Go to original source...
    13. NAZIR, M. S. and AFZA, T. 2009. Working Capital Requirements and the Determining Factors in Pakistan. ICFAI Journal of Applied Finance, 15(4): 28-38. Standard: 0972-5105. [online]. Available at: http://www.ciitlahore.edu.pk/Papers/Abstracts/146-8588087907446883308.pdf [accessed 17 March 2014].
    14. OZKAN, A. and OZKAN, N. 2004. Corporate cash holdings: An empirical investigation of UK companies. Journal of Banking, 28(9): 2103-2134. Web of science. [online]. Available at: http://linkinghub.elsevier.com/retrieve/pii/S0378426603002292. [accessed 22 November 2013]. DOI: 10.1016/j.jbankfin.2003.08.003 Go to original source...
    15. PAVELKOVÁ, D. and KNÁPKOVÁ, A. 2009. Výkonnost podniku z pohledu finančního manažera. 2nd Edition. Praha: Linde.
    16. REŽŇÁKOVÁ, M. 2010. Řízení platební schopnosti podniku: řízení platební schopnosti... a praktických aplikací. 1st Edition. Praha: Grada publishing.
    17. SUBRAMANIAM, V., TANG, T. T., YUE, H. and ZHOU, X. 2011. Firm structure and corporate cash holdings. Journal of Corporate Finance, 17(3): 759-773. Web of science. [online]. Available at: http://linkinghub.elsevier.com/retrieve/pii/S0929119910000349. [accessed 22 November 2013]. DOI: 10.1016/j.jcorpfin.2010.06.002 Go to original source...
    18. TOMEK, G. 2007. Řízení výroby a nákupu. 1st Edition. Praha: Grada.
    19. TUFAIL, S. 2013. Impact of Working Capital Management on Profitability of Textile Sector of Pakistan. In: Proceedings of 3rd International Conference on Business Management. University of Management and Technology, 27-28 February. Lahore (Pakistan): University of Management and Technology.
    20. VAHID, T. K., ELHAM, G., MOHSEN A. K. and MOHAMMADREZA, E. 2012. Working Capital Management and Corporate Performance: Evidence from Iranian Companies. Procedia - Social and Behavioral Sciences, 62: 1313-1318. Web of science. [online]. Available at: http://linkinghub.elsevier.com/retrieve/pii/S187704281203666X. DOI: 10.1016/j.sbspro.2012.09.225 Go to original source...

    This is an open access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY NC ND 4.0), which permits non-comercial use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content