Working Capital Management and Liquidity Reserves: The Context of Risk Retention

• Autorzy: Monika Wieczorek-Kosmala , Anna Doś , Joanna Błach , Maria Gorczyńska
• Języki publikacji: EN

Abstrakty

EN

Working capital management belongs to most relevant company's decisions, as it influences both profitability and liquidity. In the liquidity context, the paper offers a broader view on the scope of working capital management decisions, by expanding its linkages with risk management. In particular, the paper develops a conceptual model of the analysis of company's liquidity reserves, which is relevant for establishing company's risk retention capabilities. In the empirical layer, the paper examines the sample of Polish listed companies with regard to the magnitude, relevance and time-suitability of liquidity reserves. The empirical verification is also directed on the identification of these areas of working capital management which are relevant for sourcing liquidity reserves. In this aspect, cluster analysis and factor analysis was implemented. The study found that the majority of the examined companies hold liquidity reserves. As the most relevant aspect of working capital management the maintenance of financial stability has emerged.(original abstract)

Słowa kluczowe

EN

Management of working capital; Financial liquidity; Profitability; Stock market companies

PL

Zarządzanie kapitałem obrotowym; Płynność finansowa; Rentowność; Spółki giełdowe

• Czasopismo: Journal of Economics & Management / University of Economics in Katowice
• Rocznik: 2016
• Numer: nr 23
• Strony: 5--20

Twórcy

autor

Monika Wieczorek-Kosmala

• University of Economics in Katowice, Poland

autor

Anna Doś

• University of Economics in Katowice, Poland

autor

Joanna Błach

• University of Economics in Katowice, Poland

autor

Maria Gorczyńska

• University of Economics in Katowice, Poland

Bibliografia

• Abuzar M., Eljelly A. (2004): Liquidity-Profitability Tradeoff: An Empirical Investigation in an Emerging Market. "International Journal of Commerce & Management", Vol. 14, No. 2, pp. 48-61.
• Acharya V., Almeide H., Campello M. (2013): Aggregate Risk and the Choice between Cash and Lines of Credit. "The Journal of Finance" October, Vol. LXVIII, No. 5, pp. 2059-2117.
• Appuhami B. (2008): The Impact of Firms' Capital Expenditure on Working Capital Management: An Empirical Study across Industries in Thailand. "International Management Review", Vol. 4, No. 1, pp. 11-24.
• Baños-Caballero S., García-Teruel P., Martínez-Solano P. (2010): Working Capital Management in SMEs. "Accounting and Finance", Vol. 50, No. 3, pp. 511-527.
• Brigham E., Houston J. (2011): Fundamentals of Financial Management. Concise Edition. Cengage Learning, Mason.
• Chapman R. (2006): Simple Tools and Techniques for Enterprise Risk Management. John Wiley & Sons, Hoboken.
• Chiou J., Cheng L. (2006): The Determinants of Working Capital Management. "Journal of American Academy of Business", Vol. 10, No. 1, pp. 149-155.
• Culp C. (2006): Structured Finance and Insurance. The ART of Managing Capital and Risk, Hoboken, John Wiley & Sons.
• Damodaran A. (2012): Investment Valuation: Tools and Techniques for Determining the Value of Any Asset, Hoboken, John Wiley & Sons.
• Ehrhardt M., Brigham E. (2008): Corporate Finance: A Focused Approach. Cengage Learning, Mason.
• Emery D., Finnerty J., Stowe J. (2004): Corporate Financial Management. 2nd ed. Pearson/ Prentice Hall, Upper Saddle River.
• Faulkender M., Wang R. (2006): Corporate Financial Policy and the Value of Cash. "Journal of Finance", Vol. 61, No. 4, pp. 1957-1990.
• Fazzari M., Petersen B. (1993): Working Capital and Fixed Investment: New Evidence on Financing Constrains. "The RAND Journal of Economics", Vol. 24, No. 3, pp. 328-342.
• Filbeck G, Krueger T, Preece D. (2007): CFO Magazine's Working Capital Survey: Do Selected Firms Work for Shareholders? "Quarterly Journal of Business and Economics", Vol. 46, No. 2, pp. 3-22.
• García-Teruel P., Martínez-Solano P. (2010): Determinants of Trade Credit: A Comparative Study of European SMEs. "International Small Business Journal", Vol. 28, No. 3, pp. 215-233.
• Harford J., Klasa S., Maxwell W. (2014): Refinancing Risk and Cash Holdings. "The Journal of Finance", Vol. LXIX, No. 3, pp. 975-1112.
• Hofmann E., Maucher D., Piesker S., Richter P. (2011): Ways Out of the Working Capital Trap. Empowering Self-Financing Growth through Modern Supply Management. Springer, Heidelberg-Dordrecht-London.
• Jajuga K., ed. (2009): Zarządzanie ryzykiem. Wydawnictwo Naukowe PWN, Warszawa, pp. 13-32.
• Knauer T., Wöhrmann A. (2013): Working Capital Management and Firm Profitability. "Journal of Management and Control", Vol. 24, pp.77-87.
• Lam J. (2003): Enterprise Risk Management. From Incentives to Controls. John Wiley & Sons, Hoboken.
• Le Guyader A. (2011): Excess Corporate Cash: Liquidity, Insurance, or Value Destroyer? "The Journal of Corporate Accounting & Finance", Vol. 23, No. 1, pp. 41-45.
• Loneux M. (2004): The Working Capital Approach, "Business Analyst", Vol. 25, No. 2, pp. 2-24.
• Maness S., Zietlow T. (2005): Short-Term Financial Management. Third Edition, Thomson Southwest, Chicago.
• Michalski G. (2014): Value-Based Working Capital Management: Determining Liquid Asset Levels in Entrepreneurial Environments. Palgrave Macmillan, New York.
• Mooi E., Sarstedt M. (2011): A Concise Guide to Market Research. Springer-Verlag, Berlin-Heildelberg.
• Nunn K. (1981): The Strategic Determinants of Working Capital: A Product-Line Perspective. "The Journal of Financial Research", Vol. 4, No. 3, pp. 207-219.
• Opler T., Pinkowitz L., Stulz, R., Williamson, R. (1999): The Determinants and Implications of Corporate Cash Holdings. "Journal of Financial Economics", Vol. 52, No. 1, pp. 3-46.
• Ortín-Ángel P., Prior D. (2004): Accounting Turnover Ratios and Cash Conversion Cycle. "Problems and Perspectives of Management", Vol. 1, pp. 1-19.
• Parr G. (2011): Lazard Vice Chairman. Interview. "Bloomberg" February 17.
• Pass C., Pike R. (1987): Management of Working Capital: A Neglected Subject. "Management Decision", Vol. 25, No. 1, pp. 18-24.
• Patil S. (2008): Industrial Engineering and Management. Technical Publications, Pune.
• Preve L., Sarria-Allende V. (2010): Working Capital Management. Oxford University Press, New York.
• Reddy D., Kameswari P. (2004): Working Capital Management Practices in Pharma Industry: A Case Study of "Cipla Limited". "Management Accountant", Vol. 39, No. 3, pp. 8-44.
• Reider R. (2007): Operating Your Business on Cash Basics. "The Journal of Corporate Accounting and Finance", Vol. 6, No. 1, pp. 29-38.
• Rejda G.E. (2001): Principles of Risk Management and Insurance. Addison Wesley Longman, Boston.
• Romsesburg H. (2004): Cluster Analysis for Researchers. Lulu Press, Raleigh, North Carolina.
• Sanger J. (2014): Working Capital Management: Applications and Case Studies. John Wiley & Sons, New York.
• Sierpińska M., Wędzki D. (2004): Ocena przedsiębiorstwa według standardów światowych. Wydawnictwo Naukowe PWN, Warszawa.
• Smith K., ed. (1980): Readings on the Management of Working Capital. West Publishing, Saint Paul.
• Smith K. (1973): State of the Art of Working Capital Management. "Financial Management", Vol. 4, pp. 50-55.
• Tan P., Steinbach M., Kumar V. (2006): Introduction to Data Mining. Addison Wesley, Boston.
• Wieczorek-Kosmala M., Błach J., Doś A., Gorczyńska M. (2013): Znaczenie oceny rezerwy płynności w zarządzaniu ryzykiem przedsiębiorstwa. In: W. Sułkowska (ed.), Rynek ubezpieczeń. Współczesne problemy, Difin, pp. 48-59.
• Wienraub H., Visscher S. (1998): Efficiency of Working Capital Management and Corporate Profitability. "Financial Planning and Education", Vol. 8, No. 2, pp. 37-45.
• Vaughan E., Vaughan T. (2003): Fundamentals of Risk and Insurance. John Wiley & Sons, New York.