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

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....

Full description

Saved in:
Bibliographic Details
Main Authors: M. T., Hirnissa, Mohd Ashhari, Zariyawati
Format: Article
Language:English
Published: Alicon Publications 2017
Online Access:http://psasir.upm.edu.my/id/eprint/62046/1/How%20working%20capital%20management%20affects%20the%20profitability%20of%20small%20and%20medium%20size%20enterprises%20%28SMES%29%20in%20Malaysia.pdf
http://psasir.upm.edu.my/id/eprint/62046/
http://ijebmr.com/link.php?id=77
Tags: Add Tag
No Tags, Be the first to tag this record!
Institution: Universiti Putra Malaysia
Language: English
id my.upm.eprints.62046
record_format eprints
spelling my.upm.eprints.620462019-03-20T07:52:29Z http://psasir.upm.edu.my/id/eprint/62046/ How working capital management affects the profitability of small and medium size enterprises (SMES) in Malaysia? M. T., Hirnissa Mohd Ashhari, Zariyawati 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. Alicon Publications 2017-10 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/62046/1/How%20working%20capital%20management%20affects%20the%20profitability%20of%20small%20and%20medium%20size%20enterprises%20%28SMES%29%20in%20Malaysia.pdf 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 http://ijebmr.com/link.php?id=77
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description 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.
format Article
author M. T., Hirnissa
Mohd Ashhari, Zariyawati
spellingShingle M. T., Hirnissa
Mohd Ashhari, Zariyawati
How working capital management affects the profitability of small and medium size enterprises (SMES) in Malaysia?
author_facet M. T., Hirnissa
Mohd Ashhari, Zariyawati
author_sort M. T., Hirnissa
title How working capital management affects the profitability of small and medium size enterprises (SMES) in Malaysia?
title_short How working capital management affects the profitability of small and medium size enterprises (SMES) in Malaysia?
title_full How working capital management affects the profitability of small and medium size enterprises (SMES) in Malaysia?
title_fullStr How working capital management affects the profitability of small and medium size enterprises (SMES) in Malaysia?
title_full_unstemmed How working capital management affects the profitability of small and medium size enterprises (SMES) in Malaysia?
title_sort how working capital management affects the profitability of small and medium size enterprises (smes) in malaysia?
publisher Alicon Publications
publishDate 2017
url http://psasir.upm.edu.my/id/eprint/62046/1/How%20working%20capital%20management%20affects%20the%20profitability%20of%20small%20and%20medium%20size%20enterprises%20%28SMES%29%20in%20Malaysia.pdf
http://psasir.upm.edu.my/id/eprint/62046/
http://ijebmr.com/link.php?id=77
_version_ 1643837656651530240