Since 2014
The effect of working capital management on profitability: the case of small medium and micro enterprises in South Africa
The Journal of Accounting and Management
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| Title |
The effect of working capital management on profitability: the case of small medium and micro enterprises in South Africa
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| Creator |
ENOW, Samuel Tabot; Part time lecturer
BRIJLAL, Pradeep; Senior lecturer |
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| Subject |
working capital; cash conversion cycle; SMMEs; profitability.
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| Description |
Working capital is vital in any business, especially in SMMEs, given that most of their assets are in the form of current assets. Management of working capital is vital in order to improve profitability of the business. This study investigated the effect working capital management on profitability, using fifteen South African SMMEs, listed on the Alt-X on the JSE, from 2008-2012, using a multiple regression analysis. The results show a positive relationship between number of days account receivable, number of day’s inventory and negative relationship between number of days payable and cash convention cycle. Thus minimizing working capital and decreasing the cash conversion cycle increases profitability and hence shareholder value.
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| Publisher |
The Journal of Accounting and Management
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| Contributor |
—
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| Date |
2014-12-20
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| Type |
Peer-reviewed Article
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| Format |
application/pdf
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| Identifier |
http://journals.univ-danubius.ro/index.php/jam/article/view/2316
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| Source |
The Journal of Accounting and Management; Vol 4, No 2 (2014): JAM
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| Language |
en
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| Rights |
The author fully assumes the content originality and the holograph signature makes him responsible in case of trial.
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