How did the COVID-19 pandemic affect net working capital in industrial production companies?

Abstract

Industry is one of the key sectors of Slovakia's economy and accounts for approximately 22% of GDP. Industrial production accounts for an average of 85% of the industry's contribution to GDP. The period of 2020 and 2021 was a crisis for all sectors of the economy due to the announcement of the global COVID-19 pandemic. Regarding the importance of industrial production in Slovakia's economy, we examine the impact of the coronavirus crisis on a sample of companies operating in this sector. Changes in the operational activity of enterprises are directly reflected in the volume of their net working capital. The aim of the study is to research changes in the volume of net working capital of enterprises in individual branches of the manufacturing industry in Slovakia from 2017 to 2021. The Wilcoxon signed-rank test was used to examine the significance of interannual changes in this indicator. The findings point to the growth of the volume of net working capital in crisis periods in almost all branches of industrial production and confirm the increase in requirements for managing working capital in periods of economic decline.