An analysis of the net working capital management strategy in polish aluminum pressure foundries

Abstract

Net working capital management is of key importance for the development of every enterprise. Net working capital directly affects the income, costs, profit and financial safety of business units. It is very complicated to manage it as it concerns the two most important areas from the point of view of short-term management of the current assets and current liabilities. Stocks, receivables from customers, cash or current liabilities in trade, service or production enterprises are managed in a completely different way. Therefore, other strategies for managing net working capital are applied in commercial, service or production enterprises. This is primarily due to the differences that arise in the structure of current assets. The purpose of this article is to present a management strategy for working capital in small and medium production enterprises. For the analysis, 62 aluminum pressure foundries operating in Poland were selected. The analysis was carried out on the basis of the financial statements of the enterprises surveyed, and the research period covered the years 2015-2017. In the article, based on selected enterprises, it was assessed whether the applied capital management strategy model is beneficial for them and, if necessary, in which areas of working capital management changes are necessary.