Determinants of working capital that influence the profitability of small businesses in Guayaquil, Ecuador
DOI:
https://doi.org/10.29105/rinn16.31-6Keywords:
Accounts receivable, Inventories, Accounts payable, cash conversion cycle, ProfitabilityAbstract
Nowadays, small businesses in Guayaquil, Ecuador play a fundamental role. In that regard, it is defined the importance of the proper management of the factors of working capital, which contributes significantly to profitability and growth of these companies. This is feasible to achieve through an efficient control and establishing appropriate policies regarding accounts receivable inventories administration, accounts payable and cash conversion cycle, in such a way it collaborates in an effective way in
operational decision making of companies. The aim of this preliminary study is to analyze the decisive factors of working capital that influence on profitability of small businesses of Guayaquil, Ecuador. Thus, the main research question is defined: What are the decisive factors of working capital that have an influence on profitability of small businesses of Guayaquil? The results were obtained through the logit method (organized), which led to two significant variables: accounts payable administration and cash conversion cycle on profitability of small businesses.
Downloads
References
Amarjit Gill, N. B. (2010). The Relationship Between Working Capital Management and Profitability: Evidence From The United States. Business and Economics Journal.
Brealey, R. S. (2006). Working capital management, corporate finance. Mcgraw Hill.
Deloof, M. (2003). Does working Capital Management affect profitability of Belgian firms? Journal of Business Finance and Accounting.
Falope OI, A. O. (2009). Working capital management and corporate profitability: evidence from panel data analysis of selected quoted companies in Nigeria. Research Journal of Business Management, 73-84.
Garcia-Teruel PJ, M.S. (2010). Effects of working capital management on SME profitability. International Journal of Managerial Finanace,, 164-167.
Grablowsky, B. (1984). Financial Management of Inventory. Journal of Small Business Management, Vol 22.
INEC. (2017). Instituto Nacional de Estadísticas y Censos.
Lawrence J. Gitman, Chad J. Zutter. (2012). Administración Financiera Décimo segunda edición. México: Pearson.
Longenecker, J. C. (2007). Ciclo de capital de Trabajo. México: Cengage Learning Editores.
Padachi, k. (2006). Trends in Working Capital Management and its Impact on Firms’Performance: An Analysis of Mauritian Small Manufacturing Firms. International Review of Business Research Papers , Vol.2 pag.45-48.
Perez José Antonio, Castro Olga y García Beatriz. (2009). Revista de Contabilidad y Dirección, 119-140.
Raheman A, N. M. (2007). Working capital management and profitability – case of Pakistani firms. . International Review of Business Research Papers, 279-300.
Soenen, Hyun-Han Shin and Luc. (1998). Efficiency of Working Capital Managenet and Corporate Profitability. Financial practice and Education.
Thuvarakan, S. (2013). Impact of working Capital Management on Profitability in UK Manufacturing Industry.
Veli, A. (2015). The effect of cash conversion cycle on profitability of small and medium sized enterprises. International Journal of Management Sciences and Business Research.
Ghosh SK, M. S. (2003). Working capital management efficiency: a study on the Indian cement industry. The Institute of Cost and Works Accountants of India.
Eljelly, A. (2004). Intercambio de liquidez-rentabilidad una investigación empírica en un Mercado emergente. Revista Internacional de Comercio y Administración.
Lazaridis I, T. D. (2006). Relationship between working capital management and profitability of listed companies in the Athens stock exchange. Journal of Financial Management and Analysis,, 26-25.
Raheman A, N. M. (2007). Working capital management and profitability – case of Pakistani firms. . International Review of Business Research Papers, 279-300.
Rodriguez c, Caceres J., (2007). Modelo de elección discreta y especificaciones ordenadas. Estadistica Española.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2019 Innovaciones de Negocios
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
The InnOvaciOnes de NegOciOs magazine is a free and open access electronic magazine of a scientific-academic nature and is a publication of the Autonomous University of Nuevo León, in which the authors retain their copyright and grant the magazine the exclusive right to first publication of the work. Third parties are allowed to use the published content, as long as the authorship of the work is acknowledged and the first publication in this journal is cited.
For more information, please contact the Research Secretary (FACPyA) of the Autonomous University of Nuevo León. Telephone: (81) 1340-4430. Email: revinnova@uanl.mx
