Capital Management Practices Research Articles

FINANCIAL MANAGEMENT PRACTICES ON GROWTH OF BUSINESS ENTERPRISES IN MBINGA DISTRICT, TANZANIA

A robust financial management system forms the foundation for business growth and long-term survival. However, there is limited information on the financial management practices that contribute to business growth in the Mbinga district. This study examined financial management and working capital management practices. A semi quasi-experimental research design was employed, utilizing questionnaires distributed to a sample of 62 business owners. Descriptive statistics were analyzed using the SPSS package. The results indicated that 41.9% of business enterprises employed working capital management practices, while 24% used capital structure management practices. Financial management practices were found to enhance management efficiency with a mean score of 3.74, increase the availability of capital with a mean score of 3.61, and improve operational margins with a mean score of 3.56. The study concluded that financial management practices are crucial for business growth and recommended their implementation. The study also found that capital structure management practices were applied to a lesser extent, although businesses showed an understanding of balancing debt and equity for financial sustainability. These findings suggest that the effective implementation of financial management practices is crucial for the growth and performance of businesses in the district. The study concludes that the integration of sound financial management practices contributes to better financial decision-making, risk mitigation, and resource optimization, leading to business expansion and sustainability. From a policy perspective, the study recommends that regulators and stakeholders encourage firms to leverage debt financing due to its associated tax benefits and advantages for financial sustainability. Theoretically, the findings underscore the relevance of agency theory in understanding the dynamics between managers and shareholders, and the principle of optimal capital structure in maximizing firm value. These insights provide a foundation for future research and practical interventions aimed at improving financial management practices in similar contexts.

Empirical perspective of working capital management practices among large building construction firms in Ghana

Purpose This paper is a response to the failure of construction firms to use sufficient attention to their working capital management (WCM) practices, resulting in operational challenges, and leading to the collapse of firms in most developing countries. Hence, this study aims to explore the empirical perspective of WCM practices among large building construction firms (LBCFs) in Ghana, to help achieve the Sustainable Development Goal 9. Design/methodology/approach The study collected primary data through structured survey questionnaires from LBCFs in Ghana. The CEOs/Directors, General Managers and Accountant/Finance of LBCFs in Ghana formed the unit of analysis based on a simple random sampling technique. Mean score, standard deviation and one-sample t-test were used to perform the empirical analysis of the study. Findings According to this study's empirical results, LBCFs appear to have effective WCM practices in place. This was evidenced in the surveyed responses which indicate that the sector’s WCM practices sound good based on the mean scores and statistically significant as the t-values > 1.664. Notably, LBCFs in Ghana pay their suppliers early to reduce the fear of adverse effect of late payments on their credit history, making them conservative in their approach toward financial management. Originality/value This is a pioneering paper in a developing country like Ghana, highlighting the significance of gaining an in-depth understanding of WCM practices among LBCFs. The findings of this study are expected to provide valuable information to industry players toward ensuring WCM efficiencies and can serve as a solid foundation for further empirical studies.

Human capital management practices, employee image and university social responsibility: Basis for building competitive advantage framework

Human capital management practices, employee image and university social responsibility: Basis for building competitive advantage framework

Assessment of Working Capital management Practice: on the case study of Dire Dawa National Cement Factory

Assessment of Working Capital management Practice: on the case study of Dire Dawa National Cement Factory

Venture Capital Investment and Growth of Small and Medium Enterprises (SMES) In Bayelsa State, Nigeria

The paper explored the impact of venture funding on the growth of Small and Medium Enterprises (SMEs) in Bayelsa State, Nigeria. Specifically, it investigates the effects of different venture capital financing methods, the cost of venture capital, and venture capital management support on sales growth within the SME sector. Using a survey research design, data was collected from 300 registered SMEs in Bayelsa State. Primary data was gathered through questionnaire instruments and analyzed using descriptive and inferential statistics. The findings, revealed through regression analysis, indicate that capital financing positively affects SMEs' sales growth, while the cost of capital also exerts a positive influence on sales growth. However, management support exhibits a negative effect on sales growth within SMEs. These results underscore the significance of venture capital financing mechanisms in fostering the growth of SMEs in Bayelsa State, Nigeria, while also highlighting potential areas for improvement in venture capital management practices to better support SME development.

The Effects of Working Capital Management on the Financial Performance of Commercial and Service Firms Listed on the Nairobi Securities Exchange in Kenya

Working capital management is critical because it affects a company’s profitability, liquidity, and investment decisions, all of which have an impact on financial performance. As a result, effective and efficient working capital management is an essential component for commercial and service businesses. Given the importance of the commercial and services industries to the Kenyan economy, the goal of this research was to investigate the impact of working capital management on the financial performance of these firms, particularly those listed on the Nairobi Securities Exchange (NSE), from 2003 to 2022. Working capital management was measured using the average age of inventory, average collection period, average payment period, and cash conversion cycle, whereas financial performance was measured using return on asset, return on equity, and net operating profit margin. Using panel regression analysis, the results showed that the average inventory age, average collection period, average payment period, and cash conversion cycle were all negatively related to financial performance for NSE-listed commercial and service firms. Based on the findings, it is recommended that Kenyan commercial and service firms adopt prudent optimal working capital management practices to improve firm financial performance and maximize shareholder wealth.

The Role of Human Talent Capital in Shaping Firm Value: Evidence from Non-Financial Sector of Pakistan Stock Exchange (PSX).

Purpose- This study examines the relationship between human talent capital and firm performance, focusing on firm value, growth opportunities, and volatility. The interaction effect of firm size on this association is also explored. Study Design/methodology/approach – This quantitative study uses a fixed effects model; the study analyzes data from 290 firms over 11 years (2013-2023). Diagnostic tests are employed to ensure the robustness of the results. Findings- The findings of the study reveal a significant positive impact of human talent capital on firm value and growth opportunities. Supported by quantitative measures, larger firms show greater utilization of human talent capital. Moreover, human talent capital mitigates cash flow volatility, highlighting its role in firm risk management. Profitability, liquidity, and innovation also significantly affect firm value and growth. Research limitations/implications – The study has several limitations. Firstly, the generalizability of the findings may be constrained by the focus on a specific industry and geographic region. Secondly, the reliance on quantitative data and fixed effects model might overlook qualitative factors influencing the human talent capital phenomenon. Thirdly, external factors such as macroeconomic conditions and regulatory changes could impact the study's findings, deserving further exploration. Research Practical Implications- The study advocates for corporate governance reforms and policy interventions to prioritize human talent capital investments. Financial strategies such as maintaining liquidity and managing leverage are recommended to stabilize firm volatility. Originality/value- This research highlights human talent capital as a key determinant of firm performance, encouraging strategic investments in human talent capital and financial management practices to enhance organizational success.

Bridging the Gap: Exploring the Impact of Human Capital Management on Employee Performance through Work Engagement

The aim of this study was to suggest and test a research model that examines whether work engagement mediates the effect of human capital management practices (HCMPs) on employee performance. These relationships were assessed through the Smart PLS 4 (Partial Least Square) software using Partial Least Square-based Structural Equation Modelling (PLS-SEM). Data were elicited from full-time hotel employees and their managers in South Africa. Based on the PLS-SEM results, work engagement was identified as a mediator of the effects of HCMPs on employee performance. Specifically, HCMPs, manifested by training, career opportunities, and rewards, improve work engagement, triggering employee tasks, and adaptive and creative performance. Additionally, work engagement had a positive influence on task performance, adaptive performance, and contextual performance. This research contributes by empirically testing work engagement as a full mediator in the relationship between HCMPs and employee performance, offering insights into the crucial role of HCMPs in fostering employee engagement and performance within the hospitality industry. Implications of the results are discussed, and directions for future research are presented.

Financial Management Practices and Financial Sustainability in Mission Hospitals, Kiambu County, Kenya

Purpose: The study aimed to examine the role of financial management practices in the financial sustainability of mission hospitals in Kiambu County, Kenya. It seeks to understand how financial planning, funding practices, working capital management, and health sector regulations impact the economic stability and operational viability of these vital healthcare institutions. Methodology: The study utilized a descriptive cross-sectional research design to explore the financial management practices and their impact on the financial sustainability of mission hospitals in Kiambu County, Kenya. Data collected on various financial indicators and management practices were analyzed using the Statistical Package for the Social Sciences (SPSS) version 22. Descriptive statistics such as mean and standard deviation were computed to summarize the financial management practices observed in the hospitals. The findings were presented using tables to display the summary statistics and charts and graphs to illustrate trends and comparisons across different financial indicators. Additionally, inferential analyses, including Pearson correlation and multiple linear regression, were conducted to assess relationships between variables and determine the predictors influencing the financial sustainability of the hospitals. Findings: The study achieved an 89.6% response rate, revealing a predominantly male (53.4%) and mature workforce, with most respondents aged 31–40 and over 51. Significant positive relationships were found between financial sustainability and financial planning and control practices (β1 = 0.241, p = 0.003), financing and funding practices (β2 = 0.231, p = 0.002), and working capital management practices (β3 = 0.332, p = 0.000). Financial management practices explained 39.2% of the variation in financial sustainability. Health sector regulations significantly moderated the relationship between financial planning and control practices and financial sustainability (β4a = -0.215, p = 0.035), but had no significant moderating effect on financing or working capital management practices. Unique Contribution to Theory, Practice and Policy: The study findings align with several financial theories, providing valuable insights into financial management practices in mission hospitals. They support the Pecking Order Theory by highlighting the prioritization of internal financing to maintain autonomy and minimize information asymmetry. Additionally, the findings contribute to the Cash Conversion Cycle Theory, emphasizing the role of efficient working capital management in enhancing liquidity and reducing the need for external financing. Moreover, the research supports contingency theory by underscoring the influence of financial management practices on financial sustainability and advocating for tailored financial strategies in mission hospitals. The study also contributes to the theory of budgeting by stressing the importance of systematic budgeting in financial decision-making for resource allocation and financial stability. These insights offer valuable guidance for both policymakers and practitioners in mission hospitals, informing policy decisions and providing practical recommendations to enhance financial management practices and achieve greater financial sustainability in these healthcare institutions.

Effect of Working Capital Management Practices on Financial Performance of Hotels in Kenya: A Case of Selected Three Star Hotels in Garissa Town

Effect of Working Capital Management Practices on Financial Performance of Hotels in Kenya: A Case of Selected Three Star Hotels in Garissa Town

Supervisor Impact on Employee Careers: The Role of Rating Differentiation

ABSTRACT Organizations invest heavily in supervision to increase the competitive advantage of their human capital. Although recent studies show that supervisors add value in general, it is not well understood what specific supervisory behaviors are relevant for employee career outcomes. To that end, this study explores the performance evaluation process and focuses on supervisors’ evaluation behavior. Interpreting a supervisor’s tendency to differentiate as a way of advancing employee development, I provide theory-consistent evidence revealing the relevance of differentiation for employee career outcomes. Using proprietary archival data, I demonstrate that differentiation relates positively to employees (1) performing more successfully in a new position upon promotion, (2) receiving a promotion to the next position, and (3) remaining in the organization. Therefore, this study presents novel and relevant evidence on the importance of specific supervisory behaviors in establishing effective human capital management practices.

Investigate the Correlation between the Implementation of Working Capital Management Practices and the Financial Performance of Manufacturing Firms

Manufacturing firms play a crucial role in the development of every country, contributing to economic growth in various ways. This study aims to investigate the correlation between the implementation of working capital management practices and the financial performance of manufacturing firms in Rwanda, with a special focus on Kigali City. As stated by Daniel Zhang, Chairman and CEO of Alibaba, "We believe small is beautiful. When small businesses can grow faster and healthier, it benefits the whole society." The modern world recognizes industrialization as a key driver of economic growth, and the development of small and medium enterprises is considered vital for economic promotion, as they contribute significantly to the economic development of any country. Despite their immense potential, research indicates that SMEs often lack proper knowledge of working capital management practices, posing a threat to their survival. Managing key components of working capital like cash management, receivables, and inventories is of paramount importance. The study concluded that, there is a strong and significant correlation between the implementation of working capital management practices, particularly cash management, and overall financial performance.

A Study on Working Capital Management of R.C.F Ltd

This study examines the working capital management practices of R.C.F Ltd., a mid-sized manufacturing firm. The research aims to evaluate the efficiency of the company’s working capital components—accounts receivable, accounts payable, inventory, and cash management—and their impact on overall financial performance. By analyzing financial data from the past five years, the study identifies trends and key performance indicators related to working capital. The findings reveal that R.C.F Ltd. maintains a moderate level of liquidity but faces challenges in optimizing its inventory turnover and managing accounts receivable effectively. The study also highlights the correlation between efficient working capital management and profitability, suggesting that improvements in these areas can lead to enhanced financial stability and operational efficiency. Recommendations include adopting stricter credit policies, improving inventory control mechanisms, and utilizing more effective cash management strategies. This research contributes to the broader understanding of working capital management in manufacturing firms and provides practical insights for similar companies aiming to optimize their financial practices. Keywords : Working Capital Management, Financial Performance, Liquidity, Accounts Receivable, Accounts Payable, Inventory Management, Cash Management, Manufacturing Industry, R.C.F Ltd., Operational Efficiency.

A STUDY ON WORKING CAPITAL MANAGEMENT AT ASHLEY ALTEAMS INDIA LIMITED

This study delves into the intricacies of operating capital management within Organization, analyzing the company's strategies and practices in keeping most suitable tiers of liquidity and operational performance. Through a comprehensive analysis of monetary statements, cash go with the flow patterns, and enterprise benchmarks, the studies evaluate the effectiveness of numerous running capital control techniques employed by way of Organization. Furthermore, the study explores the impact of powerful running capital control at the enterprise's profitability, cash go with the flow dynamics, and common economic performance. By providing treasured insights into the agency's control of cutting-edge assets and liabilities, this study contributes to the wider understanding of running capital control practices inside the context of contemporary business operations. This observe examines the fluctuations in economic ratios through the years and the general working capital management practices of Organization. Key words: Operating Capital Management, Liquidity Management, Profitability Analysis, Financial Performance

Working Capital Management in Different Sector

Effective working capital management is crucial for the financial health and sustainability of businesses across industries. This research paper aims to investigate and compare the working capital management practices adopted by companies in different sectors. The study employs a mixed-methods approach, combining quantitative analysis of financial data with qualitative insights gathered through interviews with industry experts. The research analyzes the working capital management performance of companies operating in various sectors, including manufacturing, retail, technology, and services. Key metrics such as liquidity ratios, inventory turnover, receivables collection period, and payables deferral period are evaluated to assess the efficiency and effectiveness of working capital management strategies employed by firms in each industry. Furthermore, the paper examines the impact of industry-specific factors such as demand volatility, supply chain dynamics, technological advancements, and regulatory environments on working capital management practices. By comparing and contrasting the findings across different industries, this study provides valuable insights into the factors influencing working capital management decisions and identifies best practices that can be adapted by companies to optimize their working capital efficiency and enhance overall financial performance. The research contributes to the existing literature by offering a comprehensive analysis of working capital management practices across diverse industries, highlighting industry-specific challenges and opportunities. The findings of this study have practical implications for managers, investors, and policymakers seeking to improve working capital management strategies and enhance the competitiveness and resilience of businesses in today's dynamic economic landscape.

A Systematic Literature Review of Working Capital Management in Business Organizations

Working capital management is a crucial aspect of financial management that focuses on the effective management of a company's current assets and liabilities to ensure the smooth operation of day-to-day activities. A literature review on working capital management reveals a plethora of research studies highlighting the significance of optimizing working capital to enhance a firm's profitability, liquidity, and overall financial performance. Several studies have emphasized the importance of maintaining an optimal level of working capital to strike a balance between liquidity and profitability. By efficiently managing components such as cash, inventory, accounts receivable, and accounts payable, companies can minimize the risk of financial distress and improve their operational efficiency. Researchers have proposed various models and techniques to assess and improve working capital management practices, such as the cash conversion cycle, the operating cycle, the current ratio, and the quick ratio. Moreover, studies have also explored the impact of working capital management on firm value and performance. It has been widely documented that effective working capital management positively influences a company's profitability and shareholder value. By reducing the cash conversion cycle and operating cycle, firms can release trapped capital and reinvest it in value-creating activities. Conversely, inadequate working capital management can lead to financial constraints, increased costs, and reduced profitability. Furthermore, researchers have investigated the determinants and challenges of working capital management across different industries and regions. Factors such as industry characteristics, firm size, profitability, growth rate, and macroeconomic conditions have been identified as key determinants of working capital management practices. Cultural, regulatory, and technological factors also play a significant role in shaping companies' approaches to working capital management. In conclusion, the literature review on working capital management underscores the importance of adopting efficient strategies to manage current assets and liabilities effectively. By optimizing working capital levels, companies can improve their financial performance, enhance liquidity, and create long-term value for stakeholders.

Does working capital management improve financial performance in China's agri-food sector during COVID-19? A comparison with the 2008 financial crisis.

The objective of this study is to explore the impact of working capital management on firms' financial performance in China's agri-food sector from 2006 to 2021. In addition, we analyze whether this impact is the same during the 2008 financial crisis and the 2020 COVID-19 crisis. Working capital management is measured by working capital investment policy (measured by current assets to total assets ratio), working capital financing policy (measured by current liabilities to total assets ratio), cash conversion cycle, and net working capital ratio. The results reveal that current assets to total assets ratio and net working capital ratio positively influence financial performance measured through return on assets (ROA), while current liabilities to total assets ratio and cash conversion cycle negatively influence ROA. We also find that the relationship between working capital management and financial performance is more affected during COVID-19 than in the 2008 financial crisis. The findings might provide important implications for company managers to make optimal working capital management practices, depending on the economic environment.

The Role of Competitor Analysis, Market Orientation, and Service Quality in Working Capital Management and Operational Leverage as Links to Financial Stability of Manufacturing Companies Listed on the IDX: A Qualitative Approach

This study investigates the interconnectedness of competitor analysis, market orientation, service quality, working capital management, and operational leverage in shaping organizational financial stability. The research aims to identify strategic implications for effective management of these factors and provide insights for both theoretical understanding and managerial practice. The study employs a systematic literature review methodology to analyze existing research across various domains and synthesizes findings to elucidate the relationships among the variables. The results reveal that competitor analysis serves as a foundational element in strategic planning by providing insights into market dynamics and competitive positioning. Market orientation complements this by emphasizing customer-centricity and responsiveness to market needs, while service quality emerges as a critical determinant of organizational success. Effective working capital management and operational leverage strategies significantly impact financial stability by optimizing resource utilization and cost efficiency. The findings suggest that organizations must adopt a multidimensional approach to strategic management, integrating insights from marketing, finance, and operations. Managerial implications include prioritizing investments in market intelligence, fostering a customer-centric culture, optimizing working capital management practices, and carefully managing operational leverage. Collaboration across functional areas and agile decision-making are essential for adapting strategies to dynamic market conditions. Overall, the study contributes to a deeper understanding of the complex interplay among these factors and provides actionable recommendations for enhancing financial stability and sustaining competitive advantage.

Exploring human capital management practices: A comprehensive review

This paper comprehensively reviews Human Capital Management (HCM) practices, focusing on key dimensions such as Training and Development, Performance Appraisal, Recruitment and Selection, and Career Management. The success and survival of an organization depend on the efficient management of human resources in today's fast-paced, cutthroat commercial world. Through an extensive analysis of existing literature and empirical studies, this review identifies the critical role of HCM practices in enhancing employee skills, performance, engagement, and retention. The examination of Training and Development initiatives reveals their significance in fostering employee growth, improving competencies, and ensuring adaptability to changing job requirements. Similarly, Performance Appraisal systems emerge as essential tools for providing feedback, aligning individual goals with organizational objectives, and driving continuous improvement. Recruitment and Selection processes are highlighted as crucial stages in acquiring and retaining top talent, emphasizing the importance of aligning recruitment strategies with organizational culture and goals. Moreover, Career Management practices are explored in depth, emphasizing their role in promoting employee satisfaction, retention, and professional growth through clear career pathways, mentoring, and skill enhancement opportunities. Overall, this review underscores the need for organizations to prioritize effective HCM practices as strategic imperatives. By investing in the development, engagement, and retention of human capital, organizations can adapt to market dynamics, foster innovation, and achieve sustainable growth. The findings of this review offer valuable insights for practitioners and scholars alike, informing future research directions and guiding the implementation of HCM strategies in diverse organizational contexts.

From Theory to Practice: HRM Practices and Intellectual Capital in Fostering Innovation

In a rapidly changing business environment, organizational innovation and employee innovative work behavior are the basis for high organizational performance and long-term success. Against this background, the purpose of this study is to propose a conceptual model that links knowledge-based human resource management and intellectual capital and collaborative human resource management practices to innovative behavior at the level of the employee in the organizational context. Drawing on the existing literature and conceptual argument, the present study will argue for this strategic importance of workers’ innovative performance in promoting organizational success. Specifically, the study argues that adopting KHRM and CHRM practices are effective strategies that foster innovation within the organization. Furthermore, the research also reports the critical importance of intellectual capital in driving innovative work behavior. Intellectual capital acts as a mediator between HRM practices and innovative work behavior. The study's theoretical framework and conceptual propositions provide valuable insights into understanding and promoting innovation inside organizations. Additional investigation into these connections would provide pragmatic advice for HRM experts and organizational leaders who want to cultivate creativity and drive achievement within their organizations.