Working Capital Management of Small Firms

2014 ◽  
Author(s):  
Haitham Nobanee
Keyword(s):  
Small Firms ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management

Current assets management of small enterprises

2015 ◽  
Vol 42 (4) ◽  
pp. 549-560 ◽  
Author(s):  
Haitham Nobanee ◽  
Jaya Abraham
Keyword(s):  
New York ◽  
Small Firms ◽  
Stock Exchange ◽  
Dynamic Panel Data ◽  
Method Of Moment ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Trade Cycle ◽  
Content Type

Purpose – The purpose of this paper is to investigate the relationship between a firm’s net trade cycle, its size and liquidity. Design/methodology/approach – The relation between the firm’s net trade cycle and its liquidity is examined using Generalized Method of Moment Dynamic Panel-Data System Estimation with Robust Standard Errors for a sample of 5,802 US non-financial firms listed in the New York Stock Exchange, American Stock Exchange, NASDAQ Stock Market and Over the Counter Market for the period 1990-2004 (87,030 firm-year observations). The analysis is applied at the levels of the full sample and divisions of the sample by size. Findings – The results show negative and significant relationship between net trade cycle, as a comprehensive measure of efficiency in working capital management, and liquidity for small firms. Originality/value – Most of the existing literature focusses on the large firm’s experience of working capital management. Small firms generally face liquidity problems and have limited access to external capital, and studies on their efficiency in working capital management are scant. Thus the present study is useful in understanding the relation between the firm’s net trade cycle and liquidity of small firms.

scholarly journals The impact of working capital management on cash holdings of large and small firms: evidence from Jordan

2019 ◽  
Vol 16 (3) ◽  
pp. 76-86 ◽  
Author(s):  
Mohammad Fawzi Shubita
Keyword(s):  
Cash Flow ◽  
Small Firms ◽  
Small Scale ◽  
Separate Analysis ◽  
Cash Holding ◽  
Capital Management ◽  
Working Capital ◽  
Data Set ◽  
Working Capital Management ◽  
The Impact

Liquidity is a firm’s ability to pay its current obligations as they come due and thus remain in business in the short run, which reflects the ease with which assets can be converted to cash. The objective of working capital management (WCM) is to minimize the cost of maintaining liquidity while guarding against the risk of insolvency, working capital policy applies to short-term decisions, and capital structure finance applies to long-term decisions.Several studies have been conducted on the impact of WCM on cash holding levels. The impact of WCM on liquidity and cash holding levels is analyzed in this study. The study also makes a comparison between large- and small-scale firms. Panel data for 62 Jordanian industrial firms covering an eleven-year period (2006–2016) have been analyzed. The descriptive analysis indicates that large firms hold more cash than small firms, as well as more debt, cash flow and growth.The findings of the data set indicate that WCM, as a variable (working capital net of cash), is a strong predictor of firm cash holding levels. When a firm has several cash substitutes, it will maintain low cash levels. The separate analysis shows that there are significant differences between small- and large-scale firms for determinates related to cash holding levels. Firm size and cash flow ratios were strong predictors of cash holding levels for both samples.

Pengaruh Manajemen Modal Kerja Terhadap Profitabilitas Dan Risiko

Liquidity ◽  
2017 ◽  
Vol 6 (2) ◽  
pp. 95-102
Author(s):  
Sri Setia Ningsih
Keyword(s):  
T Test ◽  
Raw Material ◽  
Risk Level ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Trading Company ◽  
Regression Correlation ◽  
Descriptive Method

The purpose of this research is to know about working capital management applied, and its influence on profitability and risk. The research object is trading company moves in import & distribute chemical raw material. The research used analysis descriptive method, and the hypothesis was testing by simple linier regression, correlation, and determination. The result of the research shows that the effect of the implementation of working capital management on the change of the net working capital with tend to rise has a profitability level of 10.4% lower than the net working capital change with tend to go down of 46%, but instead on the risk level, the net working capital change with tend to rise has a risk level of 43.8% higher than the change in net working capital with tend to go down of 0.3%.Based on  t test, the result shows that the net working capital change influence  is not significant  to profitability and risk.

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