Managerial Decisions in Relation to the Management of Corporate Profitability Performance in the Manufacturing Industry in the Czech Republic

The aim of the chapter is to evaluate elements of managerial decision making on the profitability of corporate performances in the Czech Republic. In order to achieve the aim, we investigate the relationship between profitability of corporate performance (measured through gross operating profit) and the elements that are the subject of managerial decision making in the production process and which can impact on the profitability of corporate performance. This is mainly the cash conversion cycle (including accounts receivables, accounts payables and inventory), financial assets and financial debt. The correlation analysis, the Granger causality test and the generalized method of moments (GMM) will be used in the assessment of the elements of managerial decision making on the profitability of corporate performances in the Czech Republic. The data sample will include data for the period 2007-2017. The analysis will include companies operating according to the CZ-NACE classification in the manufacturing industry in the Czech Republic. In this research, we used a sample of 3645 manufacturing companies. Using the correlation analysis, the Granger causality test and the GMM showed a statistically significant relationship between the elements of the managerial decision making (such as cash conversion cycle, financial assets, and financial debt) and the gross operating profit in manufacturing companies in the Czech Republic.