PROFITABILITY AND WORKING CAPITAL MANAGEMENT OF CZECH SMEs: EMPIRICAL EVIDENCE IN THE PERIOD OF FINANCIAL CRISIS

In this study we attempt to measure the link between working capital management and profitability on a sample of Czech SMEs during the time of financial crisis. As the period of our measurement coincides with the worst financial crisis that affected developed economiesat the beginning of the 21 century, we expect the profitability of Czech firms and corresponding variables of working capital management to be also affected. In this conjuncture we want to discover the role working capital management on microeconomic in-company level. Some negative relations andincreased volatility of results can be expected during the crisis years, evenwhen Czech companies were found to be profitable in general. The results of our analysis show that, the working capital management performs in the same manner as in "normal times", which can be interpreted is a sign of long term stability of Czech economic environment. Nevertheless our results need to be verified and contrasted with subsequent (non-crisis) periods of data, which could be a topic for future research.