Abstract
Micro, Small, and Medium Enterprises (MSMEs) are recognized worldwide as the main source of dynamism, innovation, and flexibility. This study aims to analyze the financial management practices used by the Pekalongan batik craft SMEs. The method used is descriptive with a qualitative approach. Data were collected by structured interviews with a samples are 30 determined by snowballs sampling. The results show that the owner’s knowledge of financial management is still limited, did not prepared a financial budget regularly, and rarely compare the budget with the actual results. Most owners had check supplies once a week and did not evaluate the feasibility before started to invest. Range for ROA were 2% to 5%, and NPM 10% to 20%. All owners are satisfied with doing the business, and no one to thinks of moving to other businesses in other fields.
Highlights
MSMEs are recognized worldwide as the main source of dynamism, innovation, and flexibility
The success or failure of MSMEs depend on the continuation of their financial condition
This study aims to find out (1) financial management practice, (2) planning and financial control, (3) capital management, (4) financial performance and (5) company value on MSMEs of Batik Pekalongan handcraft
Summary
MSMEs are recognized worldwide as the main source of dynamism, innovation, and flexibility. I focus on 3 main variables, namely: the financial planning, working capital management and investment appraisal. The turnover of accounts receivable is positively related to the performance, which means that the effective working capital has effect on the performance of SM Enterprise The implication of this result is seen by reducing the period of cash conversion, time of accounts receivable collection and date of inventory turnover, the SM Enterprise could improve their profitability (Lamptey et al, 2017). This study aims to find out (1) financial management practice, (2) planning and financial control, (3) capital management, (4) financial performance and (5) company value on MSMEs of Batik Pekalongan handcraft
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