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<p>Working capital management (WCM) plays an important role in a firm’s value, financial risk, and firm profitability. WCM requires continuous management to maintain a certain level of the numerous components of working capital (WC). The main aim of this study is to estimate the efficiency of WCM of certified firms from the European Foundation for Quality Management (EFQM) Excellence Model. The study also tests the speed to attain each firm’s target level of efficiency using industry norms as the target level of efficiency. The financial data of the Czech certified firms from the manufacturing sector was derived from the CRIBIS database from 2015 to 2020. The efficiency of WCM is measured by utilization index (UI), performance index (PI), and efficiency index (EI). The findings revealed that Gerresheimer Horsovsky Tyn Spol., Miele Technika, and Koyo Bearings Česká Republika efficiently managed WC, as their indexes are greater than 1. The number of efficient firms was the lowest in 2020 based on the year-wise comparison which means that the efficiency of WCM of the firms was severely affected by the coronavirus pandemic (COVID-19). All the β values are lower than one, which signifies that none of the selected firms outperform the manufacturing industry as a whole. The findings of the current research are useful to the management of the firms and recommends that they give importance to the different indexes of WCM and efficiently use the current assets to generate sales.</p>
</abstract>

Working capital management (WCM) plays an important role in a firm’s value, financial risk, and firm profitability. WCM requires continuous management to maintain a certain level of the numerous components of working capital (WC). The main aim of this study is to estimate the efficiency of WCM of certified firms from the European Foundation for Quality Management (EFQM) Excellence Model. The study also tests the speed to attain each firm’s target level of efficiency using industry norms as the target level of efficiency. The financial data of the Czech certified firms from the manufacturing sector was derived from the CRIBIS database from 2015 to 2020. The efficiency of WCM is measured by utilization index (UI), performance index (PI), and efficiency index (EI). The findings revealed that Gerresheimer Horsovsky Tyn Spol., Miele Technika, and Koyo Bearings Česká Republika efficiently managed WC, as their indexes are greater than 1. The number of efficient firms was the lowest in 2020 based on the year-wise comparison which means that the efficiency of WCM of the firms was severely affected by the coronavirus pandemic (COVID-19). All the β values are lower than one, which signifies that none of the selected firms outperform the manufacturing industry as a whole. The findings of the current research are useful to the management of the firms and recommends that they give importance to the different indexes of WCM and efficiently use the current assets to generate sales.

Working capital management efficiency: a study of certified firms from the EFQM excellence model

Department of Industrial Engineering and Information Systems, Faculty of Management and Economics

Financial Internet Quarterly

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Working capital management (WCM) plays an important role in a firm’s value, financial risk, and firm profitability. WCM requires continuous management to...

Working capital management efficiency: a study of certified firms from the EFQM excellence model

Published Online: Sep 30, 2022

Page range: 21 - 34

Received: May 28, 2022

Accepted: Jul 25, 2022

DOI: https://doi.org/10.2478/fiqf-2022-0017

Keywords
quality management, working capital, manufacturing sector, COVID-19, EFQM Model

© 2022 Muhammad Yousaf, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Working capital management efficiency: a study of certified firms from the EFQM excellence model

Published Online: Sep 30, 2022

Page range: 21 - 34

Received: May 28, 2022

Accepted: Jul 25, 2022

DOI: https://doi.org/10.2478/fiqf-2022-0017

Keywordsquality management, working capital, manufacturing sector, COVID-19, EFQM Model

© 2022 Muhammad Yousaf, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
quality management, working capital, manufacturing sector, COVID-19, EFQM Model