The aim of this paper is to identify the relationships between measures of working capital management (cash conversion cycle /CCC/, working capital value /WC/ and the financial liquidity /CR/) and profitability of companies listed on the Warsaw Stock Exchange. The research material consisted of data of 326 companies from 1998–2016. The analysis revealed significant non-linear relationship between WC, CR and profitability. When WC and CR values grow, profitability increases, but at a slower pace. However, there is a linear negative relationship between CCC and profitability. The results are influenced by the industry and the GDP growth. This indicates that profit-driven entrepreneurs try to delay payments to suppliers. They pay off bank loans from the funds thus generated. This study contributes to the verification of theories linking profitability with working capital management with emphasis on the influence of the industry. The results have practical implications: companies with growing profitability should not lose sight of the shortening CCC when paying off short-term loans; in some industries decreasing profitability while CR values grow may mean problems with the efficient use of current assets.

The aim of the study is to identify the main determinants of the capital structure of energy industry companies in the European Union. The study was based on a panel of 6122 companies from 25 EU countries, operating between 2011 and 2018. The study used multiple regression analysis. We have obtained strong evidence for a positive relationship between corporate debt and tangibility and size, and a negative relationship for profitability and liquidity. The factors that also affect the share of debt in capital have turned out to be growth (positive relationship) and non-debt tax shield (negative relationship), but the statistical significance of these relationships is ambiguous. We have shown that growth of industry business risk is accompanied by an increase in corporate debt and this is a distinguishing feature of the energy industry. For country-specific capital structure determinants, we have obtained strong evidence for the negative relationship between GDP growth, the level of stakeholder rights protection, the degree of capital markets development, and indebtedness of the companies studied. There has been moderate support for the hypotheses of a positive effect of inflation, taxation, and the degree of financial institutions development. Our study has also shown a negative impact of the volume of energy consumption and the share of renewable sources in its production and a positive impact of market monopolization on the indebtedness of companies from the energy industry in the EU.

PurposeThe main aim of the paper is to examine the small and medium-sized enterprises’ (SMEs) capital structure determinants in Central and Eastern Europe (CEE) (Poland, Czechia, Slovakia, Hungary, Bulgaria and Romania).Design/methodology/approachThe authors used panel models to analyze financial data of 15,253 companies operating in the years 2014–2017.FindingsThe authors confirmed the dominant role of firm-specific factors. Industry and country variables explain only 4% of debt variability of the surveyed companies. The direction of influence of the diagnosed firm-specific factors is consistent with the pecking order theory. About one-fourth of SMEs in CEE hold a stock of debt capacity. It negatively affects the share of debt in the capital. The authors did not confirm the influence of the systematic industry business risk.Research limitations/implicationsThe limitations of the study are (1) the inclusion of only six CEE countries in the sample; (2) the exclusion of microenterprises from the sample; (3) the capital structure relationships are observed following the applications of static panel; (4) the endogeneity issue has not been addressed in the model.Practical implicationsThis study shows that business-friendly institutional environment is an important factor influencing the indebtedness of companies. It increases the leverage and, consequently, the return on equity, especially in CEE countries.Originality/valueSME analyses in CEE countries are not as frequent as for other regions. Despite the classical determinants of the SMEs' capital structure, the authors have included debt capacity and systematic industry business risk in this study.

The enterprise capital structure is influenced by internal factors, i.e., the share of fixed assets in total assets, the size and growth of the enterprise, its liquidity and profitability, and the non-debt tax shield. The literature shows that external factorsmacroeconomic and institutional specifics of enterprises' environmentmay shape the strength and direction of these dependencies. The main aim of this article is to identify the relationship between external factors and the impact of internal determinants on the capital structure. The study includes the meta-analysis of papers which provide information on the relationship between internal factors and the capital structure for 35 countries. The study includes the papers published after 2000 whose research covered the period 1993-2017. A statistically significant relationship between four external factors (inflation, G.D.P. growth rate, G.D.P., index of protection of the creditors and debtors rights) and the strength and direction of the impact of internal factors on the capital structure has been found. In addition, the unambiguously negative impact of two internal factors (liquidity and profitability of the enterprise) on indebtedness was diagnosed. It also reveals that the pecking order theory constitutes a strong theoretical basis for research into the capital structure of enterprises.

The main purpose of the paper is to identify firm,- industry- and country-specific determinants of working capital management (WCM) in energy industry. The empirical research is based on 6122 EU companies operating in the years 2011–2018. The influence of internal factors on variables describing WCM (cash conversion cycle—CCC, financial liquidity—LIQ and level of working capital—WC) were identified. The factors included: size of the company (positive effect), its growth, tangibility and indebtedness (negative effect). Cash flow had a positive effect on CCC and a negative effect on LIQ and WC. The influence of industry-specific factors were also found. Companies applied similar strategies in CCC and LIQ management, following their industry averages. Measures of WCM decreased under the influence of an increase in average trade payables in the industry. Following country-specific factors were found to be significant: (i) growth of GDP and strength of legal rights had negative influence on all measures of WCM, (ii) unemployment positively affects LIQ and WC and negatively CCC, (iii) an increase in the share of renewable energy sources caused a decrease in all WCM measures, while (iv) with an increase in energy consumption, CCC and WC increased.