Dynamic analysis and the financing of the needs of working capital of the small and middle companies located in the city of João Pessoa, PB: an exploratory study

Abstract

This article has as purpose to analyze how the small and middle companies have been financing its working capital needs. The analysis was developed using the dynamic model of financial analysis, that made possible to measure the variables working capital need, treasury balance, net working capital, own circulating capital, long-term debt, and the thermometer of the Financial Situation, in the period from 2001 to 2003. The data were collected within 20 companies in seven sections of the Brazilian economy. It was verified that most of the companies analyzed was not capable to finance its working capital needs based on their own financial system. The companies used, in its majority, short-term debt, generally of larger cost and of smaller term. The small and middle companies analyzed, presented an unsatisfactory financial situation, with positive values for working capital need and net working capital and negative for treasury balance. The amount of net working capital was not enough to finance working capital needs and those companies needed to run over the financing of onerous sources of short term, to assure the covering on behalf of working capital need that net working capital was not capable to finance. The companies analyzed shown dependent of bank loans of short term to finance its operations. Key words: working capital, small and middle business, dynamic analysis.