WORKING CAPITAL MANAGEMENT AND THE INFLUENCE OF BEHAVIORAL FINANCE: THE CASE OF A DAIRY COMPANY

Purpose of the study: to understand working capital management in a large dairy company in the state of Minas Gerais, based on the behavioral approach to finance. Methodology: the research strategy based on a single case was chosen, combining quantitative and qualitative analysis tools Originality: extending the analysis of behavioral biases in decisions on investments in financial assets to the management of working capital. Main results: it was found that the most liquid accounts are those influenced by more behavioral biases. The biases present in decision-making are also consistent with the conservative profile indicated by the dynamic working capital management model. Theoretical contributions: the theoretical trade-off liquidity and profitability does not occur since a higher level of liquidity can be caused precisely by the greater profitability and cash generation capacity of the company compared to the sector. Managerial contributions: the management of working capital must assume a more strategic condition in companies and attentive to the behavioral biases of managers. As a result of the direct impacts of marketing and production policies on investment in working capital, the analysis of indicators must be aligned with the company's profile.

Automated summary

The study aims to understand working capital management in a large dairy company in Minas Gerais, Brazil, based on the behavioral approach to finance. A single case research strategy was chosen, combining quantitative and qualitative analysis tools. The study found that the most liquid accounts are influenced by more behavioral biases and the biases in decision-making are consistent with the conservative profile indicated by the dynamic working capital management model. Theoretical contributions include the absence of a trade-off between liquidity and profitability, and managerial contributions emphasize the need for a more strategic approach to working capital management and awareness of behavioral biases.