WCM component importance ranking order by SMEs: financial directors perspective

Journal article


Afrifa, G. 2014. WCM component importance ranking order by SMEs: financial directors perspective. International Journal of Current Research. 6 (1), pp. 631-4639.
AuthorsAfrifa, G.
Abstract

This paper reports the results of an investigation into the ranking order of Working Capital Management (WCM) components of Small and Medium Enterprises (SMEs) listed on the Alternative Investment Market (AIM), from the perspective of financial directors. The analyses are based on
questionnaire distributed to 248 AIM listed SMEs. The paper employs the one-way ANOVA and post hoc test on responses from 72 managers of AIM listed SMEs. The results show differences in the importance of each component of WCM. First, inventory holding period importance is shown to differ from that of accounts receivable period, accounts payable period and cash conversion cycle. The results also show that accounts receivable period importance is different from accounts payable period
and cash conversion cycle. However, there is no difference of importance between accounts payable period and cash conversion cycle. In terms of ranking order, accounts receivable period is ranked first, leading to the conclusion that given the limited resources of SMEs, they need to prioritise their WCM by focusing on accounts receivable period to improve profitability.

Year2014
JournalInternational Journal of Current Research
Journal citation6 (1), pp. 631-4639
PublisherInternational Journal of Current Research
ISSN0975-833X
Official URLhttp://www.journalcra.com/sites/default/files/4575.pdf
Related URLhttp://www.journalcra.com/
Publication dates
Print2014
Publication process dates
Deposited10 Jun 2015
Accepted29 Dec 2013
Output statusPublished
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