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1

The relevance of net working capital for value based management and its consideration within an Economic Value Added (EVA) framework

100%

Kratz N., Kroflin P.

Journal of Economics and Management

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2016

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vol. 23

21-32

EN

The EVA framework1 tries to embrace the traditional liquidity oriented working capital discussion and the more recent profit oriented access to the topic and positions working capital management within a shareholder value strategy. Our theoretical paper challenges the predictability of the impact working capital management has on EVA and thus challenges the need for working capital management being included in EVA based incentive systems. Our findings underline the complexity and limited predictability of measures addressing working capital in an EVA context and thus demonstrate the limitations of management influence on EVA.

2

Evaluating net investments in the operating working capital under certainty: The integrated approach to working capital management

100%

Szpulak A.

Business and Economic Horizons

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2015

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vol. 11

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issue 1

28-40

EN

In day-to-day operations managers decide on a variety of working capital variables influencing the size of operating cash flows its timing and risk and therefore the firm’s value. This paper reveals the tool based on NPV criterion appropriate for evaluation of net effect the changes in working capital management have on the firm’s value. This research merge previous work on the applications of the NPV criterion in the field of working capital management within discounted cash flows framework (Lieber and Orgler, 1975; Sartoris and Hill, 1983; Kim and Chung, 1990; Arcelus and Srinivasan, 1993) and contributes to it by (i) including additional working capital decision variables: advance payments, labor costs and deferral of salaries payments, (ii) focusing on moments of outflows instead of moments of costs arising and (iii) it is designed to be applicable for discretionary type of business activity. As being value-based tool presented here is superior to well established financial ratios analysis usually suggested for assessing the efficiency of working capital management.

3

Working capital management and liquidity reserves: The context of risk retention

88%

Wieczorek-Kosmala M., Doś A., Błach J., Gorczyńska M.

Journal of Economics and Management

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2016

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vol. 23

5-20

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.

Refine search results

2 Journal of Economics and Management

1 Business and Economic Horizons

1 Błach J.

1 Doś A.

1 Gorczyńska M.

1 Kratz N.

1 Kroflin P.

1 Szpulak A.

1 Wieczorek-Kosmala M.

2 2016

1 2015

The relevance of net working capital for value based management and its consideration within an Economic Value Added (EVA) framework

Evaluating net investments in the operating working capital under certainty: The integrated approach to working capital management

Working capital management and liquidity reserves: The context of risk retention