Strategic working capital management in Polish SMES: Navigating risk and reward for enhanced financial performance

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This study examines the impact of operating capital management (WCM) strategies on the monetary execution of small and medium-sized enterprises (SMEs) in Poland, with a particular focus on finding the correct equalization between liquidity and benefit. The review utilizes relapse investigation to survey the effect of forceful and conservative (WCM) techniques on the benefit and fluidity of 4,891 Polish SMEs from 2012 to 2021, as measured by an informational index of budgetary and operational information. The results demonstrate a noteworthy connection between WCM improvements and budgetary results. However, aggressive actions do not just mean higher earnings; they also involve heavier financial risks. On the other hand, cautious methods are linked with stronger financial stability but may lead to lower profit. According to the survey, when cash conversion cycle (CCC) days fall by 1%, return on total assets (ROA) can increase by approximately 1:0 percentage points. This demonstrates again that WCM is very important in improving company profits. These findings have implications for academics, practitioners, and government officials.

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    • Table 1. Descriptive findings
    • Table 2. Classification of figures by sector
    • Table 3. Explanation of the correlation matrix
    • Table 4. Performance indicators by ROA categories
    • Table 5. Analysis of working capital’s effect on ROA using fixed effects method
    • Table 6. Impacts of WC on ROIC and ROA analyzed through the application of fixed effects models
    • Table 7. Results of the analysis performed to evaluate endogeneity
    • Table 8. Investigating the impact of working capital on ROIC and ROA using centered CCC
    • Table 9. Investigating the impact of working capital on ROIC and ROA by centering INV, ACR, ACP, and CCC values
    • Table 10. Details of how pooled regression analysis was used to examine the effect of working capital on ROA and ROIC
    • Conceptualization
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    • Data curation
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    • Formal Analysis
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    • Funding acquisition
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    • Investigation
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    • Methodology
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    • Project administration
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    • Resources
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    • Software
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    • Supervision
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    • Validation
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    • Visualization
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    • Writing – original draft
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    • Writing – review & editing
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