The Impact of Cash Conversion Cycle on Profitability: The Case of Dairy Cooperatives in Poland

Role	Variable	Definition
Dependent	Cooperative profitability
	[ROA_DA]	$\frac{EBITDA}{average amount of total assets}$
	[ROA]	$\frac{EBIT}{average amount of total assets}$
Independent	Cash Conversion Cycle [CCC]	CCC = Inventory period + Receivables period – Payables period
where:
		$\begin{matrix} Inventory period = \frac{average inventories}{sales} \cdot 365 \\ Receivables period = \frac{average trade receivables}{sales} \cdot 365 \\ Payables period = \frac{average trade payables}{sales} 365 \end{matrix}$
Control	Size
	[SIZE1]	ln(average total assets)
	[SIZE2]	ln(sales)
	Leverage [LEV]	$\frac{average total debt}{average amount of total assets}$
	Growth [GROWTH]	$\frac{{sales}_{t} - {sales}_{t - 1}}{{sales}_{t - 1}}$

[i] Source: author’s own elaboration.

Table 2.

Descriptive statistics

Variable	Mean	SD	Min	Max	Q1	Me	Q3
ROA_DA	0.0632	0.0685	−0.3194	0.3494	0.0334	0.0668	0.0925
ROA	0.0198	0.0643	−0.3530	0.3017	0.0000	0.0180	0.0455
CCC	14.8726	12.1390	−25.5786	78.6988	7.1528	13.8873	21.7928
LEV	0.4460	0.1346	0.1371	0.7934	0.3418	0.4512	0.5526
SIZE1	10.6090	1.6320	6.8503	14.7564	9.4411	10.3448	11.9224
SIZE2	11.6077	1.5760	7.9663	16.0582	10.4530	11.2694	12.7689
GROWTH	0.0669	0.2049	−0.5247	1.5916	−0.0383	0.0428	0.1286

[i] Note: Variables defined in Table 1.

[ii] Abbreviations: SD – standard deviation; Min – minimum; Max – maximum; Q1 – lower quartile; Me – median; Q3 – upper quartile.

[iii] Source: author’s own calculations based on EMIS (2024)

Table 3.

Correlation matrix

Variables	ROA_DA	ROA	CCC	LEV	SIZE1	SIZE2	GROWTH
ROA_DA	1.000
ROA	0.926***	1.000
CCC	−0.091	−0.107*	1.000
LEV	−0.002	−0.078	−0.096*	1.000
SIZE1	0.189***	0.101*	0.444***	−0.196***	1.000
SIZE2	0.224***	0.131**	0.390***	−0.123**	0.980***	1.000
GROWTH	0.444***	0.462***	−0.182***	0.015	0.107*	0.152***	1.000

*** Indicates significance at 1% level

** Indicates significance at 5% level

* Indicates significance at 10% level

Source: author’s own calculations based on EMIS (2024).

Table 4.

Estimation results for models 1–4

Variables and tests	ROA_DA		ROA
Variables and tests	Model 1	Model 2	Model 3	Model 4
CCC	−0.00014 (0.0008)	−0.00003 (0.0008)	−0.00018 (0.0008)	−0.00011 (0.0008)
LEV	−0.3021*** (0.0733)	−0.2980*** (0.0692)	−0.3312*** (0.0722)	−0.3306*** (0.0694)
SIZE1	−0.0145 (0.0340)		−0.0139 (0.0343)
SIZE2		0.0130 (0.0293)		0.0040 (0.0299)
GROWTH	0.1711*** (0.0516)	0.1627*** (0.0530)	0.1703*** (0.0503)	0.1667*** (0.0523)
Constant	0.3440 (0.3475)	0.0389 (0.3304)	0.3068 (0.3552)	0.1135 (0.3403)
F test	F(9,52) = 6.42 p < 0.001	F(9,52) = 6.29 p < 0.001	F(9,52) = 6.62 p < 0.001	F(9,52) = 6.52 p < 0.001
Breusch-Pagan LM test	χ²(1) = 61.10 p < 0.001	χ²(1) = 59.48 p < 0.001	χ²(1) = 36.81 p < 0.001	χ²(1) = 35.93 p < 0.001
Hausman test	χ²(4) = 35.93 p < 0.001	χ²(4) = 35.62 p < 0.001	χ²(4) = 29.03 p < 0.001	χ²(4) = 29.87 p < 0.001
within R²	0.3724	0.3725	0.3723	0.3718
No. of obs.	318	318	318	318

Note: In models 1 and 2, the dependent variable is firm profitability, measured as ROA_DA, whereas in models 3 and 4, it is represented by ROA. Robust standard errors clustered at the firm level are reported in parentheses. Time dummies are included in the estimations, but not reported.

*** Indicates significance at 1% level

** Indicates significance at 5% level

* Indicates significance at 10% level

Source: author’s own calculations based on EMIS (2024).

Table 5.

Estimation results for models 5–8

Variables and tests	ROA_DA		ROA
Variables and tests	Model 5	Model 6	Model 7	Model 8
CCC	0.00178* (0.00096)	0.00183* (0.00097)	0.00153 (0.001)	0.00161 (0.00099)
CCC²	−0.00004*** (0.00001)	−0.00004*** (0.00001)	−0.00004*** (0.00001)	−0.00004*** (0.00001)
LEV	−0.2216*** (0.0726)	−0.2249*** (0.0720)	−0.2595*** (0.0699)	−0.2631*** (0.0684)
SIZE1	−0.0203 (0.0340)		−0.0190 (0.0345)
SIZE2		−0.0036 (0.0278)		−0.0114 (0.0283)
GROWTH	0.1730*** (0.0486)	0.1726*** (0.0485)	0.1719*** (0.0476)	0.1758*** (0.0480)
Constant	0.3555 (0.3512)	0.1846 (0.3128)	0.3170 (0.3604)	0.2482 (0.3226)
F test	F(10,52) = 26.26 p < 0.001	F(10,52) = 25.73 p < 0.001	F(10,52) = 23.93 p < 0.001	F(10,52) = 23.79 p < 0.001
Breusch–Pagan LM test	χ²(1) = 71.12 p < 0.001	χ²(1) = 68.97 p < 0.001	χ²(1) = 44.07 p < 0.001	χ²(1) = 43.22 p < 0.001
Hausman test	χ²(4) = 20.38 p < 0.001	χ²(4) = 21.57 p < 0.001	χ²(5) = 22.15 p < 0.001	χ²(5) = 24.73 p < 0.001
within R²	0.3900	0.3888	0.3865	0.3859
No. of obs.	318	318	318	318

Note: In models 5 and 6, the dependent variable is firm profitability, measured as ROA_DA, whereas in models 7 and 8, it is represented by ROA. Robust standard errors clustered at the firm level are reported in parentheses. Time dummies are included in the estimations, but not reported

*** Indicates significance at 1% level

** Indicates significance at 5% level

* Indicates significance at 10% level

Source: author’s own calculations based on EMIS (2024).

Table 6.

Turning points for models 5–8

Specification	Model 5	Model 6	Model 7	Model 8
Optimal CCC level	22.26	23.05	21.46	21.95

[i] Source: author’s own calculations based on EMIS (2024).

References

Authors

Metrics

Articles in this issue

DOI: https://doi.org/10.30858/zer/211833 | Journal eISSN: 2392-3458 | Journal ISSN: 0044-1600

Journal RSS Feed

Language: English, Polish

Page range: 92 - 109

Submitted on: Jul 1, 2025

Accepted on: Oct 8, 2025

Published on: Dec 22, 2025

Published by: The Institute of Agricultural and Food Economics – National Research Institute

In partnership with: Paradigm Publishing Services

Publication frequency: 4 issues per year

Keywords:

cash conversion cycle,

working capital management,

profitability,

dairy cooperatives,

panel data

JEL:

C33,

G32,

Q13

Related subjects:

Business and economics,

Agribusiness, food industry

© 2025 Katarzyna Ziętek-Kwaśniewska, published by The Institute of Agricultural and Food Economics – National Research Institute
This work is licensed under the Creative Commons Attribution 4.0 License.

Volume 385 (2025): Issue 4 (December 2025)