UPM Institutional Repository

How working capital management affects the profitability of small and medium size enterprises (SMES) in Malaysia?


Citation

M. T., Hirnissa and Mohd Ashhari, Zariyawati (2017) How working capital management affects the profitability of small and medium size enterprises (SMES) in Malaysia? International Journal of Economics, Business and Management Research, 1 (4). 433 - 445. ISSN 456-7760

Abstract

The purpose of this study is to investigate the effect of working capital management on the profitability of small and medium enterprises (SMEs). Balanced panel data analysis is used to achieve the purpose. The research sample consists of 722 firm-year of SMEs operated in Malaysia from 2011 to 2013. Finding reveals net working capital is positively associated with the return on assets. Besides, the component of net working capital also has positively related with return on asset. This suggests that SMEs can increase their profit when they increase the investment in working capital management. SMEs should invest more in inventories to avoid inventories shortage especially when having immediate demand from the customer. The longer of a length to pay creditor also provide SMEs more cash to use to buy inventories to accomplish demand of customers, which consequently increase the profit of the SMEs.


Download File

[img]
Preview
Text
How working capital management affects the profitability of small and medium size enterprises (SMES) in Malaysia.pdf

Download (5kB) | Preview
Official URL or Download Paper: http://ijebmr.com/link.php?id=77

Additional Metadata

Item Type: Article
Divisions: Faculty of Economics and Management
Publisher: Alicon Publications
Keywords: Working capital management; Current assets; Current liabilities; Return on asset; Small and medium enterprises (SMEs)
Depositing User: Nurul Ainie Mokhtar
Date Deposited: 20 Mar 2019 07:52
Last Modified: 20 Mar 2019 07:52
URI: http://psasir.upm.edu.my/id/eprint/62046
Statistic Details: View Download Statistic

Actions (login required)

View Item View Item