Effective working Capital Management Practice and SMEs’ financial performance: The case of SMEs operating in the service and construction sectors in Senegal

Mbaye, Marie Henriette (2023) Effective working Capital Management Practice and SMEs’ financial performance: The case of SMEs operating in the service and construction sectors in Senegal. Doctoral thesis, University of Wales Trinity Saint David.

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Abstract

The aim of this study is to investigate the correlation between working capital and the profitability of Senegalese SMEs for a sample of 7 SMEs operating in the service and construction sector in Senegal over the period 2016-2019. The study adopts an explanatory research design to analyse and focus on the correlation between variables, mainly cause and effect relationship. In furtherance, to obtain convergence, the mixed methods (qualitative and quantitative) are useful to counterbalance the strength of each other. The empirical evidence has shown that working capital and accounts receivable are negatively correlated. The findings also show an insignificant and negative relationship between profitability and debt ratio. Furthermore, the study indicates that profitability is not considerably impacted by cash conversion cycle. However, it is clear that there is a poor management of CCC. The cornerstone of this research is on SMEs operating in the service and construction industry. The study brings theoretical and practical contributions by expanding and complementing the literature on the field as well as underlining new evidence on the correlation between working capital management and profitability of SMEs operating in the service and construction sector in Senegal. Besides, it includes more intelligibility to the process of managing working capital and factors that impact the financial performance. This study contributes to the body of knowledge by identifying how the management of working capital impact the financial performance of Senegalese SMEs in the service and construction industry. Therefore, the researcher intends to fill the gap in academic literature by proposing methodological enhancements into the management of working capital. From the practitioners’ perspectives, the findings underline the significance of working capital management for firms’ profitability.

Item Type: Thesis (Doctoral)
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HG Finance
Divisions: Theses and Dissertations > Doctoral Theses
Depositing User: Natalie Williams
Date Deposited: 21 Jul 2023 11:07
Last Modified: 21 Jul 2023 11:07
URI: https://repository.uwtsd.ac.uk/id/eprint/2499

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