scholarly journals The Effect of Working Capital Management and External Capital on Going Concern for Indonesian Small and Medium Enterprises

2019 ◽  
Vol 11 (1) ◽  
pp. 21
Author(s):  
Widya Exsa Marita ◽  
Ika Permatasari
Keyword(s):  
Small And Medium Enterprises ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Going Concern ◽  
Cash Conversion Cycle ◽  
External Capital ◽  
Negative Effect ◽  
Medium Enterprises ◽  
Positive Effect

This study aimed to examine the influence of working capital management and external capital ongoing concern of small and medium enterprises in Indonesia. This study used small and medium listed enterprises in Indonesia as a sample, which were included in the Pefindo-25 index from the year 2009-2016. The results showed that working capital management had a negative effect on SME’s going concern, while the external capital had a positive effect. This study had the implication for small and medium-sized issuers, which was they were expected to be able to accelerate the company's cash conversion cycle to improve working capital management so as to improve the sustainability of their business. In addition, they were expected to consider external capital as an alternative capital to increase competitiveness in the market.

scholarly journals The Effect of Financial Management Practices on Performance of SMEs in Sri Lanka

2020 ◽  
Vol 8 (05) ◽  
pp. 1789-1803
Author(s):  
Somathilake HMDN ◽  
Pathirawasam C
Keyword(s):  
Sri Lanka ◽  
Capital Structure ◽  
Financial Management ◽  
Management Practices ◽  
Small And Medium Enterprises ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Medium Enterprises ◽  
Positive Effect

Small and Medium Enterprises (SMEs) play an important role in every developing country contributing to the growth of the economy in many ways. The aim of this study is to identify the effect of financial management practices on performance of SMEs in Sri Lanka: Special Reference to North Central Province (NCP). Working capital management practices, Investment appraisal practices, Capital structure management practices, financial reporting & analysis practices and Accounting information system practices were identified as independent variables and Performance of SMEs was identified as the dependent variable of this study. All SMEs (nearly 2000 SMEs) operating in NCP during the year 2019 was identified as the population of this study. Out of that, 322 SMEs were selected as the sample based on disproportionate stratified random sampling method and final sample was 245 manufacturing, service and trade SMEs operating in NCP. Data was collected through a structured questionnaire distributed among SMEs functioning in NCP. Descriptive statistics and inferential statistics like Pearson correlation analysis and multiple regression analysis were used to analyze data using the SPSS package. Results of the study revealed that there is a positive effect of financial management practices on performance of SMEs. Among financial management practices, working capital management practices and capital structure management practices have a significant positive effect on SMEs performance. Keywords: Capital structure, Financial Management, Performance, Small and Medium Enterprises, Sri Lanka, Working capital.

scholarly journals Working capital management and firm profitability: Evidence from SMEs in Malaysia

2020 ◽  
pp. 99-105
Author(s):  
Hoang Cong Huan, Duong Nguyen Minh Huy Hoang
Keyword(s):  
Capital Market ◽  
Trade Credit ◽  
Small And Medium Enterprises ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Accounts Receivable ◽  
Cash Conversion Cycle ◽  
Firm Profitability ◽  
Medium Enterprises

Efficient working capital management is particularly important for Small and Medium Enterprises (SMEs) in coping with greater difficulty in accessing capital market. In this research, we investigate the importance of working capital management to SMEs by analyzing the influence of working capital management and its components (inventory, accounts receivable and account payable) to profitability of SMEs. By using a sample of SMEs listed on the ACE market – an alternative, sponsor-driven equity market designed for Malaysian SMEs during the period from 2010 to 2016, our findings suggest that managers of Malaysian SMEs can enhance profitability by holding a large amount of inventory, offering more trade credit to customers, and lengthening the cash conversion cycle.

scholarly journals Management of working capital – the Achilles heel of small and medium enterprises (SMEs). The case of Greece

2018 ◽  
Vol 18 (2) ◽  
pp. 5-18 ◽  
Author(s):  
Alina Hyz ◽  
Dimitrios Stavroulakis ◽  
Petros Kalandonis
Keyword(s):  
Small And Medium Enterprises ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Demand Volatility ◽  
Medium Enterprises ◽  
The Relationship ◽  
Of Greece ◽  
Limit Access ◽  
Future Growth

Working capital represents the amount of funds invested in firms' current assets. Optimizing working capital management is a challenge and a necessity for firms especially today due to the demand volatility and limit access to bank credit. This paper investigates the relationship between working capital management and firms' performance in small and medium enterprises in Greece. The results suggests that an effective working capital management is a necessary component of firm's future growth and profitability. The analysis used data for a sample of 459 small and medium enterprises for the period from 2008 to 2012. The paper is organized as follows: in the next section we briefly present the problem based on literature review. This is followed by the presentation of research methodology and the data sources used in the analysis. The results are presented and discussed in section three. Last section summarizes the conclusions and presents further opportunities for research.

scholarly journals PENGARUH PENGGUNAAN INFORMASI AKUNTANSI DAN MANAJEMEN MODAL KERJA PELAKU UMKM TERHADAP KEBERHASILAN USAHA DENGAN UMUR USAHASEBAGAI VARIABEL PEMODERASI (STUDI KASUS PADA INDUSTRI KREATIF DI YOGYAKARTA)

2020 ◽  
Vol 12 (1) ◽  
pp. 19-32
Author(s):  
Khoirunnisa Cahya Firdarini ◽  
Agung Slamet Prasetyo
Keyword(s):  
Structural Equation ◽  
Small And Medium Enterprises ◽  
Accounting Information ◽  
Total Sample ◽  
Creative Industries ◽  
Business Success ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Medium Enterprises

Small and medium enterprises (SMEs) are one of important sector of national economic that have contributed to labor absorption and Gross Domestic Product (GDP). They could survive of financial crisis both in national and global scale. This  research  examines  the  effect  of  accounting information and working capital management toward business success of small and medium enterprise (SMEs) with age of business as moderating variable. The  population of  this  research  are  small and medium enterprises (SMEs) in creative industries sector operated in Yogyakarta district. They are handycraft, culinary and fashion. Based  on  purposive  sampling  method,  total  sample  of  this  research  is  200 SMEs.  Hypothesis  testing  used  is  path analysis using structural equation modelling (SEM). The test result shows that accounting information and working capital management have  positive  and  significant  effect to the success of SMEs.Age of business as moderating variable also have positive  and  significant  effect to the success of SMEs.

scholarly journals Pengaruh Manajemen Modal Kerja Terhadap Profitabilitas Dengan Moderasi Financial Constraints

SKETSA BISNIS ◽  
2021 ◽  
Vol 8 (1) ◽  
pp. 72-81
Author(s):  
Artha Merika Indah Puspita Sari ◽  
Rahmat Setiawan
Keyword(s):  
Linear Regression ◽  
Analytical Method ◽  
Financial Constraints ◽  
Sampling Method ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Purposive Sampling ◽  
Cash Conversion Cycle ◽  
Negative Effect

Abstract                This study aims to determine the effect of working capital management on profitaility. Working capital management here is seen through cash conversion cycle company. The study also looked at the moderating effect of financial constraints on the effect of working capital management on profitaility. The research used purposive sampling method and the analytical method used in this study is multiple linear regression. Based on the results of the analysis it can be concluded that cash conversion cycle has a significant negative effect on profitability. The financial constraints variabel strengthens the negative effect of the cash conversion cycle on profitability.   Keywords: working capital management, cash conversion cycle, profitability, and financial constraints. Abstrak Penelitian ini bertujuan untuk mengetahui pengaruh manajemen modal kerja terhadap profitabilitas. Manajemen modal kerja disini dilihat melalui siklus konversi kas perusahaan. Penelitian ini juga melihat efek moderasi financial constraints pada pengaruh manajemen modal kerja terhadap profitabilitas. Metode pengambilan sampel menggunakan purposive sampling, dan metode analisis yang digunakan pada penelitian ini adalah metode regresi linier berganda. Berdasarkan hasil analisis dapat disimpulkan bahwa manajemen modal kerja melalui siklus konversi kas berpengaruh negatif signifikan terhadap profitabilitas. Variabel financial constraints memperkuat pengaruh negatif siklus konversi kas terhadap profitabilitas. Kata Kunci: manajemen modal kerja, siklus konversi kas, profitabilitas dan financial constraints.

scholarly journals Impact of working capital management on the profitability of smes through cash operation cycles in Kumasi

2020 ◽  
Author(s):  
Genesis Gyasi Sah
Keyword(s):  
Management Practices ◽  
Business Processes ◽  
Small And Medium Enterprises ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Managerial Skills ◽  
Key Factor ◽  
The Government ◽  
Medium Enterprises

A business ought to be able to breed an adequate amount of cash and cash equivalent to meet its short-term liabilities if it is to carry on and develop in business. For that reason, working capital management which helps an entity to, efficiently and effectively manage current assets and liabilities is a key factor in the company’s long-term success; without working capital, the non- current assets will not function. The better the degree to which current assets exceed current liability, the more solvent or liquid a company is likely to be. This paper observes the relationship between working capital management practices of small and medium enterprises (SMEs) and the performance and profitability of these businesses in the Kumasi Metropolis distinctively Asafo, to evaluate key ratios of industries of such working capital management policies in ensuring that current assets meets current liabilities, to assess the degree to which management of SMEs are dedicated to the effective and efficient management of working capital. The implication of the findings is that the government of Ghana should pursue policies aimed at encouraging training and improving the managerial skills of SME owner/managers as well as creating the enabling environment for the development of improved modern technologies to transform the business processes of these vital industries.

scholarly journals Nexus of Working Capital Management and Firm Performance in Nigerian Food and Beverages Industries: A Link with Risk-Return Theory

2017 ◽  
Vol 9 (1(J)) ◽  
pp. 90-98
Author(s):  
Odunayo Magret Olarewaju ◽  
Mishelle Doorasamy ◽  
Titilayo Moromoke Oladejo
Keyword(s):  
Debt Management ◽  
Debt Ratio ◽  
Sales Growth ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Risk Return ◽  
Food And Beverages ◽  
Negative Effect ◽  
Positive Effect

This paper examines the nexus of working capital management and financial performance of selected multinational food and beverages industries in Nigeria for the period between 2006 and 2014 and establishes its linkage with risk-return theory. An explanatory research design is adopted and the secondary data used were gathered from 5 purposively selected quoted food and beverages companies using GLS panel regression analysis. The pooled regression shows that account receivable ratio (ARR) and debt ratio (DER) have negative effect but significant at 1%, working capital (WCA) is also significant at 5% but had positive effect, however, sales growth (SGR) was insignificant. It is also discovered from the Fixed Effect Estimation that working capital management variables such as account receivable ratio (ARR) and debt ratio (DER) have negative effect but significant at 1%, working capital (WCA) is also significant at 5% but has positive effect, while sales growth (SGR) has negative effect but insignificant to the performance of the companies. This signifies reduction in the performances of food and beverages industries which calls for urgent attention since they are posting inverse effect. The unison in both estimations shows that those variables are the major factors influencing the performance of food and beverages industries in Nigeria and thus, it is concluded that the management board of these industries should restructure their working capital management policy as it has the tendency of affecting the dividend policy and firms’ liquidity, which invariably affects the maximization of shareholders’ wealth. This can only be done when managers reduce account receivable days; ensure proper debt management technique, improve sales strategies to enhance sales growth as well as maintain optimal working capital level to reflect the risk-return theory of firms.

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