The impact of working capital management on company’s profitability: Empirical evidence from Serbia

Abstract

© Universidade Federal Rural de Pernambuco 2017. All rights reserved. Working Capital Management is one of the key issues of financial management and efficient management of business activities of the company. This paper analyzed the impact of the policy of working capital management on profitability in the food industry in the Republic of Serbia in 2014. The food industry is one of the most important economic sectors of the Western Balkans in terms of competitive advantage. The sample included 95 active companies. By applying multiple regression analysis, the influence of certain variables (CR, CATAR, CLTAR, DTAR) of working capital management was measured on profitability (ROA). The results of regression analysis showed that most of the analyzed variables significantly affect profitability. Bearing in mind the observed variables and the importance of food industry in terms of foreign exchange and investment, this paper determines the requirements for improving management of working capital in order to increase profitability and value of the company.