African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4056

Article in Press

Practices of Working Capital Management: A Study on Small Scale Manufacturing Enterprises of Tigray, Ethiopia

Hayleslasie Tsegay Aregawi and B. Chandra Mohan Patnaik

  •  Received: 06 February 2019
  •  Accepted: 11 March 2019
The aim of this study is to assess the practice of working capital management in small-scale manufacturing enterprises in Adi-grat Town, Ethiopia. The effective and efficient practice of WCM plays a significant role in asymptomatic operations of day to day business activities and to satisfy current obligations. Data were collected from 209 SME through self-administrative inquiry and selected via simple random sampling techniques. The researcher founds that SSME has a good culture of preparing cash budget and the establishment of petty cash funds, the existence of credit policy, screen clients, cash discount, stick and extending credit period, effective control of stock movements, counting of inventory, purchase materials on the account and offering on discount. But weak in computerized accounting, preparation of bank reconciliation, stock, inventory budget, the safety of stock, update stocks, attention on security and authorization of stocks, level of inventory, computerized inventory management, inventory level determination, timely payments. Just in time and material requirement planning was used, relatively accounts receivable practice performs better. The researcher recommends that every responsible body should support SME to improve their know-how and capacities via regular training on financial management related fields.

Keywords: Accounts Payable, Accounts Receivable, Cash, Inventories, Working Capital