Labour Costs and Capital Employed of Limited Liability Companies in the Czech Republic

The problem of the differences of labor costs in the agricultural sector has been well-known mainly for the agricultural sector due to its specific characteristics of the agricultural production and seasonal workforce. Less monitored intra-industry labor costs differences are used for the analysis and for the uncovering of the reasons behind the labor costs differences among limited liability companies in different regions. The aim of this paper is to find out differences of the labor costs to output ratio and capital employed to output ratio of limited liability companies across regions in the Czech Republic for a period from 2007 to 2013. For this research there will be used the different variables of labour costs to output ratio, capital employed to output ratio and labour costs to capital employed ratio and their differences from average across the regions of Czech limited liability companies. The results show that there is a strong negative relationship between variables of the working capital management and profitability. The results show that the region with highest positive disparity from the average of the labor costs to output ratio and capital employed to output ratio during the monitored period is Karlovy Vary region and the region with highest negative disparity is Prague.