Strategies and Effectiveness of Working Capital Management in Food Industry Enterprises

The research determines the strategies and effectiveness in working capital management using an EVA (Economic Value Added) indicator on the example of food industry companies. The period of research covers the years of 2003-2007. A method of identifying the working capital strategy according to the risk-return concept is presented. Economic Value Added (EVA) of the companies is estimated in order to determine dependencies between the working capital management strategy and the increase of the value for their owners. The superiority of effective working capital strategies over the ineffective ones according to the EVA criterion has been determined. Conservative working capital strategies were characterised by relatively higher effectiveness in comparison with the aggressive ones. A statistically significant dependence between the Economic Value Added and the level of working capital in the company has not been noted.