Use of Trade Credit by Dairies in Poland with Regard to the Legal Form of the Entity
Katarzyna Ziętek-Kwaśniewska
https://orcid.org/0000-0003-3817-8499
Maria Zuba-Ciszewska
https://orcid.org/0000-0002-5543-1620
Abstract
The main purpose of this paper is to evaluate the use of trade credit by dairies in Poland, taking into account their legal form – cooperative versus non-cooperative dairies. The survey covered 113 dairies in Poland, of which 55.8% were cooperatives and 44.2% were entities operating in another form. The study concerned the years 2018–2020. The financial data used in this paper was retrieved from the Emerging Markets Information Service database (EMIS). The results show that trade receivables were an important item in total assets and current assets of dairies, and trade payables were an important source of financing their operations. During the period under consideration, the dairies surveyed reduced their use of trade credit, especially as a trade creditor. The number of net trade debtors increased in 2020 relative to previous years due to the increase in their number in the group of dairy cooperatives. The dairies surveyed were slightly faster in recovering trade receivables than repaying their obligations to suppliers. In 2020 relative to 2018, most dairies shortened their cash conversion cycle. Non-cooperative dairies showed higher average shares of trade receivables in total assets and current assets than cooperatives, which can be linked to differences in their goals. Dairy cooperatives paid off their trade payables and collected trade receivables faster, as well as managed their inventories more efficiently than their non-cooperative counterparts.
Keywords:
Trade credit, dairy sector, cooperatives, cash conversion cycleReferences
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