Ausgehend vom Bedarf an unternehmensinternen, relativ marktunabhängigen Maßnahmen zur Stärkung der Innenfinanzierungskraft von Unternehmen, kann die angestrebte Liquiditätssicherung und Ertragsstabilisierung aus einer effizienten Steuerung der Working-Capital-beeinflussenden Prozesse hervorgehen. Der vorliegende Beitrag fokussiert dabei die definitorische Abgrenzung des Working Capital und des Working Capital Management. Außerdem werden die finanziellen Wirkungen des WCM aufgezeigt. Eine detaillierte Betrachtung der das Working-Capital-beeinflussenden Prozesse verdeutlicht die Komplexität des Prozessgefüges und die Notwendigkeit eines ganzheitlichen Ansatzes zur Working-Capital-Steuerung.

This thesis studies the relationship between efficient working capital management and firm profitability, and if the global financial crisis has affected the relationship. Previous literature has presented inconsistent results regarding the impact of working capital management on firm profitability, finding both negative and positive effects. It has also been argued that the global financial crisis has increased the attention of and possibly changed the attitude towards working capital management as a strategy in order to increase firm profitability. In the study, the cash conversion cycle is used as a measure for working capital management, and return on assets as a measure for firm profitability. The sample in this thesis consists of 1170 observations from 78 Swedish listed companies over the time-period 2003–2017. Both multiple regression analysis and an independent-sample t-test were conducted in order to examine the given relationship. The findings of this thesis indicate that firms can increase their profitability by implementing efficient working capital management. However, the global financial crisis has not brought a change in companies' working capital management.

The cash conversion cycle which is a very important indicator measures how efficient a company manages its working capital. This indicator clearly points the effect of a company business operation from the cash flow point of view. Basically, it is an excellent systematic financial system that includes the function which will fully describe the important parts of daily operation behavior of a company. According to this study, the cash conversion cycle can completely show the skeleton of working capital management and its own business operation character of a company. By using the cash conversion cycle as a base, the model of working capital management cycle is created from a system dynamics method. A close-tight and highly dependent relationship between revenue and profit growth rate with the cash conversion cycle is illustrated in this model by inputting some criteria. The illustration shows: 1.The cash conversion cycle will affect a company¡¦s profitability. 2.The cash conversion cycle will affect Cash flow shortage risk. 3.The cash conversion cycle focuses on the period of time between ¡§payment and receiving¡¨. When a company¡¦s revenue increases substantially but profit is not increased accordingly, the length of time between payments and receiving shows a gap is created by increasing cash payments on production but less increasing or decreasing cash receiving on sales. This gap will gradually cause cash outflow greater than cash inflow. Although the account indicates that the company is profitable, the company business operation will still suffer from the cash shortage eventually. Of course, the company¡¦s strong refinancing ability may solve this problem. However, if the company has problem of refinancing and increasing its operation capital, the raising cash outflow from the gap will trigger off a counterintuitive of ¡§bankruptcy from the technical insolvency ¡§.

A shift in focus from growing revenues towards managing working capital could be observed in many companies in the recession that followed the financial crisis of 2008. This thesis therefore investigates the relation between working capital management (WCM) and revenue growth by examining 36 Swedish companies within the IT & Telecom, Wholesale, and Manufacturing industries. The results show that there currently is a general gap between the perceived and actual performance regarding WCM and the effects on revenue growth. The studied companies report a belief that no trade-off between WCM and revenue growth exists. However, the actual performance in the studied industries indicates that increases in revenues often are not justifiable in proportion to the increases in net working capital (NWC). The study also shows that responsibility for WCM and implementation of WCM decisions are to a high extent assigned to a centralized organizational level. Recommendations derived from this study are that while companies need a centralized responsibility for WCM decisions, the responsibility also needs to be decentralized for successful implementation. Furthermore, the NWC development in relation to revenue growth needs to be continually monitored.

Submitted by Fabiola Gama (fpgama@santander.com.br) on 2012-09-05T11:28:04Z No. of bitstreams: 1 Dissertacao - Fabiola Gama - 2012 07 31 - Final.pdf: 203848 bytes, checksum: bab4e2c60e01193f5368da8f74b3692e (MD5) / Approved for entry into archive by Suzinei Teles Garcia Garcia (suzinei.garcia@fgv.br) on 2012-09-05T13:04:18Z (GMT) No. of bitstreams: 1 Dissertacao - Fabiola Gama - 2012 07 31 - Final.pdf: 203848 bytes, checksum: bab4e2c60e01193f5368da8f74b3692e (MD5) / Made available in DSpace on 2012-09-05T13:24:03Z (GMT). No. of bitstreams: 1 Dissertacao - Fabiola Gama - 2012 07 31 - Final.pdf: 203848 bytes, checksum: bab4e2c60e01193f5368da8f74b3692e (MD5) Previous issue date: 2012-08-07 / The main objective of this paper is to determine how the working capital of a company that has excess profitability relates to that of the industry’s average profitability. The combined effect on profitability of the three main components of working capital—inventory, accounts receivable, and accounts payable—was analyzed through the cash cycle, as were the separate effects of working capital’s components on excess returns through receivables, inventory, and payables turnover. In addition, it was checked if variations in a company’s leverage and the prevailing interest rate could maximize the effects of changes in working capital on a company’s excess returns. Data for all companies listed on three exchanges, the BM&FBOVESPA (Brazil), BMV (Mexico), and BCBA (Argentina), were extracted from the Economática database for 2004-2011. The panel data method for econometric estimates was adopted and the Hausman test was used to choose between employing the fixed or random effects model. For Brazil, a negative relationship was proven to exist between investment in working capital and excess returns. On the other hand, receivables, inventory, and payables turnovers were not statistically significant factors at 5%, which implies that the combined effect of working capital’s three main components on excess profitability outweigh their individual influences on a company’s profitability. While it was confirmed that leverage influences investments in working capital, increasing the impact on excess returns for companies listed in Brazil, no such relationship was observed for fluctuations in interest rates. Overall, the results for Mexico and Argentina showed less statistical significance. / O objetivo principal do presente trabalho é determinar de que forma o capital de giro se relaciona com o excesso de rentabilidade de uma empresa ante a média do setor a que pertence. Analisa-se o efeito combinado dos três principais componentes do capital de giro (estoque, contas a receber e contas a pagar) — por meio do ciclo financeiro e do capital de giro líquido — e os efeitos isolados deles sobre o excesso de rentabilidade — por meio dos prazos médios de renovação dos estoques, de recebimento e de pagamento. Além disso, testou-se se o grau de endividamento e as oscilações na taxa de juros influenciam conjuntamente os investimentos em capital de giro das empresas e o excesso de rentabilidade. Do banco de dados Economática, foram extraídos dados de todas as empresas listadas, entre 2004 e 2011, na BM&FBOVESPA (Brasil), na BMV (México) e na BCBA (Argentina). Adotou-se o método de estimação econométrica de painel e, para a escolha entre os modelos de efeito fixo ou aleatório, foi utilizado o teste de Hausman. Para o Brasil, verificou-se a existência de uma relação negativa entre investimento em capital de giro e excesso de rentabilidade. Por outro lado, os prazos médios de renovação de estoques, de recebimento e de pagamento se mostraram pouco significativos nas estimações quando analisados individualmente. Subentende-se, assim, que o efeito combinado dos três principais componentes do capital de giro sobrepõe-se às suas influências individuais na definição da rentabilidade da empresa. Apenas para o Brasil ratificou-se que o grau de endividamento influencia conjuntamente os investimentos/desinvestimentos adicionais em capital de giro e o excesso de rentabilidade. O mesmo não foi observado para oscilações na taxa de juros no Brasil e na Argentina. De uma maneira geral, observou-se para o México e a Argentina resultados com uma menor significância estatística.

The aim of this thesis is to analyze the management of working capital in company Bayer s.r.o., primarily to find the weak points and to suggest measures for their improvement. First of all the company results will be evaluated based on financial analysis. Subsequently the managing process of particular working capital components will be assessed, i.e. inventories, receivables, cash and payables. The resulting findings will be interpreted and completed by proposal of measures and recommendations, which should ensure a higher efficiency of working capital management and therefore release funds, which can be used for further company development and increase its value.

Ausgehend vom Bedarf an unternehmensinternen, relativ marktunabhängigen Maßnahmen zur Stärkung der Innenfinanzierungskraft von Unternehmen, kann die angestrebte Liquiditätssicherung und Ertragsstabilisierung aus einer effizienten Steuerung der Working-Capital-beeinflussenden Prozesse hervorgehen. Der vorliegende Beitrag fokussiert dabei die definitorische Abgrenzung des Working Capital und des Working Capital Management. Außerdem werden die finanziellen Wirkungen des WCM aufgezeigt. Eine detaillierte Betrachtung der das Working-Capital-beeinflussenden Prozesse verdeutlicht die Komplexität des Prozessgefüges und die Notwendigkeit eines ganzheitlichen Ansatzes zur Working-Capital-Steuerung.

Abstract Master Thesis in Business Finance, School of Economics, Linnaeus University Authors: Adis Cikotic and Eric Hörnell Supervisor: Magnus Willesson Examiner: Andreas Jansson   Title: "Liquidity is not a matter of life and death, it is more important than that"   Background: One of the biggest concerns for Swedish small and medium businesses is their lack of capital, which might lead to lower profitability. A significant reason behind this is said to be the buyer's long payment terms contrary to the supplier's payment terms for their own expenses, which increases the risk of an imbalance between the inflows and outflows of money. This situation occurs due to, for example, power relations and institutional factors, which might affect a firm's Cash Conversion Cycle and furthermore the firm's profitability.    Purpose: The primary purpose of the thesis is to examine whether the length of a firm's Cash Conversion Cycle has an impact on the profitability of Swedish SMEs. Moreover, the purpose is to determine if the presence of Buyers Power affects a firm's profitability.    Method: The thesis has a deductive research approach where the theories applied, Cash Conversion Cycle and Buyers Power, lead to the formulated hypotheses. The quantitative research methodology is based on a data set of approximately 38 000 Swedish SME's between the years 2015-2018.    Conclusions: It could be seen that there is a concave relationship between firm's Cash Conversion Cycle and a firm's profitability for Swedish SMEs. The interpretation is therefore that both too short and too long Cash Conversion Cycle is not optimal, and the optimal length of the Cash Conversion Cycle is 36 days for Swedish SMEs. Moreover, the result showed that a presence of Buyers Power has a positive relationship with profitability, meaning that a larger ratio between a firm's accounts receivables and accounts payables increases the firm's profitability.

This thesis examines the relationship between working capital efficiency and firm profitability, and how this relationship is affected by economic fluctuations. In the existing literature, the relationship between working capital efficiency and firm profitability has been extensively researched. However, the impact of economic fluctuations on the relationship between working capital efficiency and firm profitability is sparsely researched. To the best of our knowledge, only Enqvist, Graham and Nikkinen (2014) have addressed the impact ofeconomic fluctuations on the relationship between working capital efficiency and firm profitability. This thesis is a replication of their study in another geographical setting, another time period and studying different types of firms. Using a sample of 2,589 firm-year observations of listed Swedish firms for the years 2000-2015, this thesis conducts multiple regression analysis to examine the relationship between working capital efficiency and firm profitability. The findings of this thesis propose that firms can enhance profitability by improving their working capital efficiency. However, the relationship between working capital efficiency and firm profitability does not appear to be significantly affected by economic fluctuations. This thesis contributes to the existing literature by further strengthening the understanding of the relationship between working capital efficiency and firm profitability. In addition, it also adds to the existing literature on the relationship between working capital efficiency and firm profitability in a Swedish context.

The aim of this thesis is to analyze the management of working capital in Krnovske opravny a strojirny s.r.o. and to find possible ways to improve and streamline its management. Through the analysis of individual component of working capital, evaluation of processes affecting the cash conversion cycle, analysis of working capital as a whole and via comparison with its five biggest competitors, it was suggested to take appropriate measures and that would enable the company to manage working capital more effectively going forward, realize savings and subsequently increase its value.