IDEAS home Printed from https://ideas.repec.org/a/gam/jmathe/v10y2022i15p2584-d871213.html
   My bibliography  Save this article

Working Capital Management as Crucial Tool for Corporate Performance in the Transport Sector: A Case Study of Slovakia and the Czech Republic

Author

Listed:
  • Jaroslav Mazanec

    (Department of Quantitative Methods and Economic Informatics, Faculty of Operation and Economics of Transport and Communications, University of Zilina, Univerzitna 8215/1, 010 26 Zilina, Slovakia)

Abstract

Working capital management is one of the decisive factors in increasing business performance through the efficient use of current assets such as inventories, receivables, funds, and current liabilities. The primary aim is to identify how working capital management using a wide range of liquidity and activity indicators affects the corporate performance of transport companies broken down by company size into small, medium, large, and very large companies in Slovakia and the Czech Republic using multiple linear regression analysis with achieving competitive R-square as a relevant statistical metric compared to other models from previous research. Our research focuses on a different industry than the traditional production industry. Descriptive statistics show that more than half of the assets are impelled assets in the corporate finances of transport companies. We deal with the impact of working capital management on corporate performance, considering the corporate size. This output delivers specific findings for small, medium, large, and very large businesses separately. All multiple linear regression models for estimating corporate performance are proposed for transport companies in the Czech and Slovak Republics. The results show that liquidity has a negative impact, in contrast to activity indicators except for DPO, on corporate performance in Czech transport companies. On the other hand, Slovak small, medium, and large enterprises must effectively manage free cash and cash equivalents, too. However, activity indicators, except DRO for an aggregated group of large and very large enterprises, also harm business performance. These outputs are beneficial for business management and making relevant decisions to increase business performance, the models identify the strengths and weaknesses of working capital management. In general, this research helps to make specific decisions focused on receivables, inventory management, and cash management as part of working capital management.

Suggested Citation

  • Jaroslav Mazanec, 2022. "Working Capital Management as Crucial Tool for Corporate Performance in the Transport Sector: A Case Study of Slovakia and the Czech Republic," Mathematics, MDPI, vol. 10(15), pages 1-22, July.
    • Handle: RePEc:gam:jmathe:v:10:y:2022:i:15:p:2584-:d:871213
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7390/10/15/2584/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7390/10/15/2584/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Anna Bieniasz & Zbigniew Gołaś, 2011. "The Influence of Working Capital Management on the Food Industry Enterprises Profitability," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 5(4), December.
    2. Grzegorz Zimon & Hossein Tarighi, 2021. "Effects of the COVID-19 Global Crisis on the Working Capital Management Policy: Evidence from Poland," JRFM, MDPI, vol. 14(4), pages 1-17, April.
    3. Claudiu Boțoc & Sorin Gabriel Anton, 2017. "Is profitability driven by working capital management? evidence for high-growth firms from emerging Europe," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 18(6), pages 1135-1155, November.
    4. Tiago Gonçalves & Cristina Gaio & Frederico Robles, 2018. "The impact of Working Capital Management on firm profitability in different economic cycles: Evidence from the United Kingdom," Economics and Business Letters, Oviedo University Press, vol. 7(2), pages 70-75.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Grzegorz Zimon & Hossein Tarighi & Mahdi Salehi & Adam Sadowski, 2022. "Assessment of Financial Security of SMEs Operating in the Renewable Energy Industry during COVID-19 Pandemic," Energies, MDPI, vol. 15(24), pages 1-18, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jaroslav Mazanec, 2022. "The Impact of Working Capital Management on Corporate Performance in Small–Medium Enterprises in the Visegrad Group," Mathematics, MDPI, vol. 10(6), pages 1-19, March.
    2. Sorin Gabriel Anton & Anca Elena Afloarei Nucu, 2020. "The Impact of Working Capital Management on Firm Profitability: Empirical Evidence from the Polish Listed Firms," JRFM, MDPI, vol. 14(1), pages 1-14, December.
    3. Miemie Struwig & Storm Watson, 2023. "Working Capital Management and Systems Disruption during the COVID-19 Pandemic: Evidence from South Africa," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 9(1), pages 45-48, January.
    4. Vivien Lefebvre, 2021. "Business group affiliation in rural contexts: Do small firms grow faster through working capital management?," Growth and Change, Wiley Blackwell, vol. 52(4), pages 2453-2476, December.
    5. Enwereji Prince Chukwuneme, 2022. "Impact of Covid-19 on SMMEs and the future sustainability measures: a systematic review," HOLISTICA – Journal of Business and Public Administration, Sciendo, vol. 13(2), pages 111-131, December.
    6. Abudu Braimah & Yinping Mu & Isaac Quaye & Alhassan Abubakar Ibrahim, 2021. "Working Capital Management and SMEs Profitability in Emerging Economies: The Ghanaian Case," SAGE Open, , vol. 11(1), pages 21582440219, February.
    7. Mihai Carp & Leontina Păvăloaia & Mihai-Bogdan Afrăsinei & Iuliana Eugenia Georgescu, 2019. "Is Sustainability Reporting a Business Strategy for Firm’s Growth? Empirical Study on the Romanian Capital Market," Sustainability, MDPI, vol. 11(3), pages 1-21, January.
    8. Meysam Kaviani & Reza Shahmanosuri & Maryam Batebi & Seyed Reza Seyednezhad Fahim, 2014. "Aggressive, Conservative and Moderate Policy in Working Capital Management and Firms Free Cash Flow Yield (FCFP) Evidence from Tehran Stock Exchange," International Journal of Empirical Finance, Research Academy of Social Sciences, vol. 2(3), pages 130-136.
    9. Muhammad Sheraz & Imran Nasir, 2021. "Information-Theoretic Measures and Modeling Stock Market Volatility: A Comparative Approach," Risks, MDPI, vol. 9(5), pages 1-20, May.
    10. Ahmed Mohamed Habib & Nahia Mourad, 2022. "Analyzing the Efficiency of Working Capital Management: a New Approach Based on DEA-Malmquist Technology," SN Operations Research Forum, Springer, vol. 3(3), pages 1-20, September.
    11. Afrifa, Godfred Adjapong & Tingbani, Ishmael & Adesina, Oluseyi Oluseun, 2022. "Stochastic frontier modelling of working capital efficiency across Europe," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    12. Anton, Sorin Gabriel & Nucu, Anca Elena Afloarei, 2022. "On the role of institutional factors in shaping working capital management policies: Empirical evidence from European listed firms," Economic Systems, Elsevier, vol. 46(2).
    13. Tiago Cruz Gonçalves & Cristina Gaio & Micaela Rodrigues, 2022. "The Impact of Women Power on Firm Value," Administrative Sciences, MDPI, vol. 12(3), pages 1-15, August.
    14. Dapeng Yang & Daqing Wu & Luyan Shi, 2019. "Distribution-Free Stochastic Closed-Loop Supply Chain Design Problem with Financial Management," Sustainability, MDPI, vol. 11(5), pages 1-23, February.
    15. Xhelil Bekteshi & Sevdie Alshiqi & Arbana Sahiti Ramushi, 2021. "The Impact Of Corporate Social Responsibility And Working Capital Management On Smes Performance During A Pandemic," Baltic Journal of Economic Studies, Publishing house "Baltija Publishing", vol. 7(5).
    16. Hakan Özkaya & Şebnem Yaşar, 2023. "Working capital management in the food and beverage industry: Evidence from listed European companies," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 69(2), pages 78-88.
    17. Iotti, Mattia, 2023. "Financial evaluation and credit access of agricultural firms," Economia agro-alimentare / Food Economy, Italian Society of Agri-food Economics/Società Italiana di Economia Agro-Alimentare (SIEA), vol. 25(2), October.
    18. Stanić Milan & Cita Melita & Šulentić Marina Stanić, 2023. "The Influence of Working Capital Management on the Profitability of Manufacturing Enterprises - The Case of Croatia," South East European Journal of Economics and Business, Sciendo, vol. 18(2), pages 126-139, December.
    19. Erik Hofmann & Juuso Töyli & Tomi Solakivi, 2022. "Working Capital Behavior of Firms during an Economic Downturn: An Analysis of the Financial Crisis Era," IJFS, MDPI, vol. 10(3), pages 1-20, July.
    20. Paweł Mielcarz & Dmytro Osiichuk & Paweł Wnuczak, 2018. "Working Capital Management through the Business Cycle: Evidence from the Corporate Sector in Poland," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 12(2), June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jmathe:v:10:y:2022:i:15:p:2584-:d:871213. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.