Working capital management in the food and beverage industry: Evidence from listed European companies

Hakan Özkaya and Şebnem Yaşar
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Hakan Özkaya: Department of International Trade, School of Applied Sciences, Dokuz Eylul University, Izmir, Turkey
Şebnem Yaşar: Department of Accounting and Tax Applications, Izmir Vocational School, Dokuz Eylul University, Izmir, Turkey

Agricultural Economics, 2023, vol. 69, issue 2, 78-88

Abstract: Optimizing current assets and their financing resources is of great importance for firms to sustain their existence with the highest level of profitability. However, empirical evidence from the food and beverage industry on the effects of working capital management (WCM) on profitability is scarce and mixed. This study aims to understand how various components of WCM affect the profitability of listed European food and beverage (F&B) companies. For this purpose, static panel data methodology was used to test the relationship between profitability and WCM measured by the cash conversion cycle and its components. The results were checked for robustness by using dynamic panel data methodology. Our results indicate a negative relationship between profitability and the cash conversion cycle. Unlike previous studies that have analysed a single country, this study provides evidence based on analyses of the largest possible sample of listed European F&B companies.

Keywords: cash conversion cycle; financial management; liquidity; profitability (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:69:y:2023:i:2:id:383-2022-agricecon

DOI: 10.17221/383/2022-AGRICECON

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