Abstract
The aim of the chapter is to evaluate elements of managerial decision making on the profitability of corporate performances in the Czech Republic. In order to achieve the aim, we investigate the relationship between profitability of corporate performance (measured through gross operating profit) and the elements that are the subject of managerial decision making in the production process and which can impact on the profitability of corporate performance. This is mainly the cash conversion cycle (including accounts receivables, accounts payables and inventory), financial assets and financial debt. The correlation analysis, the Granger causality test and the generalized method of moments (GMM) will be used in the assessment of the elements of managerial decision making on the profitability of corporate performances in the Czech Republic. The data sample will include data for the period 2007–2017. The analysis will include companies operating according to the CZ-NACE classification in the manufacturing industry in the Czech Republic. In this research, we used a sample of 3645 manufacturing companies. Using the correlation analysis, the Granger causality test and the GMM showed a statistically significant relationship between the elements of the managerial decision making (such as cash conversion cycle, financial assets, and financial debt) and the gross operating profit in manufacturing companies in the Czech Republic.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Balasundaram, N. (2010). Working capital management and its impact on profitability: A study of selected listed manufacturing companies in Sri Lanka.
Chary, S. T., Kastury, R., & Kumar, K. S. (2011). Relationship between working capital and profitability—A statistical approach. International Journal of Research in Finance and Marketing, 1(7). ISSN 2231-5985.
Cohen, P., West, S. G., & Aiken, L. S. (2014). Applied multiple regression/correlation analysis for the behavioral sciences (2nd Ed.). Psychology Press. ISBN 0-89859-268-2.
De Haas, R., Lelyveld, I. (2010). Internal capital markets and lending by multinational bank subsidiaries. Journal of Financial Intermediation, 19(1), 1–25.
Deloof, M. (2003). Does working capital management affect profitability of belgian firms? Journal of Business Finance & Accounting, 30(3), 585.
Engle, R. F., & Granger, W. C. (1987). Co-integration and error correction: Representation, estimation, and testing. Econometrica, 55, 251–276. ISSN 1468-0262.
Gołaś, Z., Bieniasz, A., & Czerwińska-kayzer, D. (2013). The relationship between working capital and profitability in food industry firms in Poland. Journal of Central European Agriculture, 14(1), 52–63. ISSN 1332-9049.
Howorth, C., & Westhead, P. (2003). The focus of working capital management in UK small firms. Management Accounting Research, 14, 97–111.
Lazaridis, M., & Tryfonidis, D. (2006). Relationship between working capital management and profitability of listed companies in the Athens Stock Exchange. Journal of Financial Management and Analysis, 19(1). ISSN 0970-4205.
Padachi, K. (2006). Trends in working capital management and its impact on firms’ performance: An analysis of mauritian small manufacturing firms. International Review of Business Research Papers, 2(2), 45–58. ISSN 1832-9543.
Prucha, I. R. (2014). Instrumental variables/method of moments estimation. In M. M. Fisher & P. Nijkamp (Eds.), Handbook of regional science. Heidelberg: Springer. ISBN 978-3-642-23430-9.
Singh, P., & Pandey, S. (2008). Impact of working capital management in the profitability of Hindalco Industries Limited. Journal of Financial Economics, 0(4), 62–72. ISSN 0304-405X.
Acknowledgements
This paper ensued thanks to the support of the grant IGS/18/2019 “Managerial decisions in relation to the management of corporate profitability performance in the Czech Republic.”
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2020 Springer Nature Switzerland AG
About this paper
Cite this paper
Šeligová, M., Yi, Z. (2020). Managerial Decisions in Relation to the Management of Corporate Profitability Performance in the Manufacturing Industry in the Czech Republic. In: Tsounis, N., Vlachvei, A. (eds) Advances in Cross-Section Data Methods in Applied Economic Research. ICOAE 2019. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-38253-7_27
Download citation
DOI: https://doi.org/10.1007/978-3-030-38253-7_27
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-38252-0
Online ISBN: 978-3-030-38253-7
eBook Packages: Economics and FinanceEconomics and Finance (R0)