1、 外文翻译 原文 Trends in Working Capital Management and its Impact on Firms Performance: An Analysis of Mauritian Small Manufacturing Firms Material Source: International Review of Business Research Papers Vo.2 No. 2. October 2006, Pp. 45 -58 Author: Kesseven Padachi A firm is required to maintain a balan
2、ce between liquidity and profitability while conducting its day to day operations. Liquidity is a precondition to ensure that firms are able to meet its short-term obligations and its continued flow can be guaranteed from a profitable venture. The importance of cash as an indicator of continuing fin
3、ancial health should not be surprising in view of its crucial role within the business. This requires that business must be run both efficiently and profitably. In the process, an asset-liability mismatch may occur which may increase firms profitability in the short run but at a risk of its insolven
4、cy. On the other hand, too much focus on liquidity will be at the expense of profitability and it is common to find finance textbooks (for e.g see Gitman, 1984 and Bhattacharya, 2001) begin their working capital sections with a discussion of the risk and return tradeoffs inherent in alternative work
5、ing capital policies. Thus, the manager of a business entity is in a dilemma of achieving desired tradeoff between liquidity and profitability in order to maximize the value of a firm. Small businesses are viewed as an essential element of a healthy and vibrant economy. They are seen as vital to the
6、 promotion of an enterprise culture and to the creation of jobs within the economy (Bolton Report, 1971). Small Medium-Sized Enterprises (SMEs) are believed to provide an impetus to the economic progress of developing countries and its importance is gaining widespread recognition. Equally in Mauriti
7、us the SMEs occupy a central place in the economy, accounting for 90% of business stock (those employing up to 50 employees) and employing approximately 25% of private sector employees (Wignaraja and ONeil, 1999; CSO, 2003; NPF, 2004). Storey (1994) notes that small firms, however, they are defined,
8、 constitute the bulk of enterprises in all economies in the world. However, given their reliance on short-term funds, it has long been recognized that the efficient management of working capital is crucial for the survival and growth of small firms (Grablowsky, 1984; Pike and Pass, 1987). A large nu
9、mber of business failures have been attributed to inability of financial managers to plan and control properly the current assets and current liabilities of their respective firms (Smith, 1973). Working capital management (WCM) is of particular importance to the small business. With limited access t
10、o the long-term capital markets, these firms tend to rely more heavily on owner financing, trade credit and short-term bank loans to finance their needed investment in cash, accounts receivable and inventory (Chittenden et al, 1998; Saccurato, 1994). However, the failure rate among small businesses
11、is very high compared to that of large businesses. Studies in the UK and the US have shown that weak financial management -particularly poor working capital management and inadequate long-term financing -is a primary cause of failure among small businesses (Berryman, 1983; Dunn and Cheatham, 1993).
12、The success factors or impediments that contribute to success or failure are categorized as internal and external factors. The factors categorized as external include financing (such as the availability of attractive financing), economic conditions, competition, government regulations, technology an
13、d environmental factors. While the internal factors are managerial skills, workforce, accounting systems and financial management practices. The working capital meets the short-term financial requirements of a business enterprise. It is a trading capital, not retained in the business in a particular
14、 form for longer than a year. The money invested in it changes form and substance during the normal course of business operations. The need for maintaining an adequate working capital can hardly be questioned. Just as circulation of blood is very necessary in the human body to maintain life, the flo
15、w of funds is very necessary to maintain business. If it becomes weak, the business can hardly prosper and survive. Working capital starvation is generally credited as a major cause if not the major cause of small business failure in many developed and developing countries (Rafuse, 1996). The succes
16、s of a firm depends ultimately, on its ability to generate cash receipts in excess of disbursements. The cash flow problems of many small businesses are exacerbated by poor financial management and in particular the lack of planning cash requirements (Jarvis et al, 1996). While the performance level
17、s of small businesses have traditionally been attributed to general managerial factors such as manufacturing, marketing and operations, working capital management may have a consequent impact on small business survival and growth (Kargar and Blumenthal, 1994). The management of working capital is im
18、portant to the financial health of businesses of all sizes. The amounts invested in working capital are often high in proportion to the total assets employed and so it is vital that these amounts are used in an efficient and effective way. However, there is evidence that small businesses are not ver
19、y good at managing their working capital. Given that many small businesses suffer from under capitalization, the importance of exerting tight control over working capital investment is difficult to overstate. A firm can be very profitable, but if this is not translated into cash from operations with
20、in the same operating cycle, the firm would need to borrow to support its continued working capital needs. Thus, the twin objectives of profitability and liquidity must be synchronized and one should not impinge on the other for long. Investments in current assets are inevitable to ensure delivery o
21、f goods or services to the ultimate customers and a proper management of same should give the desired impact on either profitability or liquidity. If resources are blocked at the different stage of the supply chain, this will prolong the cash operating cycle. Although this might increase profitabili
22、ty (due to increase sales), it may also adversely affect the profitability if the costs tied up in working capital exceed the benefits of holding more inventory and/or granting more trade credit to customers. Another component of working capital is accounts payable, but it is different in the sense
23、that it does not consume resources; instead it is often used as a short term source of finance. Thus it helps firms to reduce its cash operating cycle, but it has an implicit cost where discount is offered for early settlement of invoices. Although working capital is the concern of all firms, it is
24、the small firms that should address this issue more seriously. Given their vulnerability to a fluctuation in the level of working capital, they cannot afford to starve of cash. The study undertaken by (Peel et al., 2000) revealed that small firms tend to have a relatively high proportion of current
25、assets, less liquidity, exhibit volatile cash flows, and a high reliance on short-term debt. The recent work of Howorth and Westhead (2003), suggest that small companies tend to focus on some areas of working capital management where they can expect to improve marginal returns. For small and growing
26、 businesses, an efficient working capital management is a vital component of success and survival; i.e both profitability and liquidity (Peel and Wilson, 1996). They further assert that smaller firms should adopt formal working capital management routines in order to reduce the probability of busine
27、ss closure, as well as to enhance business performance. The study of Grablowsky (1976) and others have showed a significant relationship between various success measures and the employment of formal working capital policies and procedures. Managing cash flow and cash conversion cycle is a critical c
28、omponent of overall financial management for all firms, especially those who are capital constrained and more reliant on short-term sources of finance (Walker and Petty, 1978; Deakins et al, 2001). Given these peculiarities, Peel and Wilson (1996) have stressed the efficient management of working ca
29、pital, and more recently good credit management practice as being pivotal to the health and performance of the small firm sector. Along the same line, Berry et al (2002) finds that SMEs have not developed their financial management practices to any great extent and they conclude that owner-managers
30、should be made aware of the importance and benefits that can accrue from improved financial management practices. The study conducted by De Chazal Du Mee (1998) revealed that 60% enterprises suffer from cash flow problems. Narasimhan and Murty (2001) stress on the need for many industries to improve
31、 their return on capital employed (ROCE) by focusing on some critical areas such as cost containment, reducing investment in working capital and improving working capital efficiency. The pioneer work of Shin and Soenen (1998) and the more recent study of Deloof (2003) have found a strong significant
32、 relationship between the measures of WCM and corporate profitability. Their findings suggest that managers can increase profitability by reducing the number of days accounts receivable and inventories. This is particularly important for small growing firms who need to finance increasing amounts of
33、debtors. Mauritius provides a good case study for this paper as it looks at the small and medium sized enterprises operating in the manufacturing sector of a small island developing state. Most of the previous studies on working capital management and financial management of small firms have focused
34、 on the US, UK and some other developed countries like Belgium and Australia. The primary aim of this paper is to investigate the impact of WCM on corporate profitability of Mauritian small manufacturing firms. This is achieved by developing a similar empirical framework first used by Shin and Soene
35、n (1998) and the subsequent work of Deloof (2003). We extend our study by also analyzing the trends in working capital need of firms and to examine the possible causes for any significant differences between the industries. Our study focuses exclusively on the small manufacturing firms operating in
36、five major industry groups which are both registered and organized as proprietary/private companies. This restriction places a limit on the number of firms qualifying for the study and is further narrowed down following the revised Companies Act of 2001 which requires firms with a given turnover thr
37、eshold to file only an aggregated financial statements. Thus the empirical study is based on a sample of 58 small manufacturing companies. The data has been collected from the financial statements of the sample firms having a legal entity and have filed their annual return to the Registrar of Compan
38、ies. The sample was drawn from the directory of Small Medium Industrial Development Organization (SMIDO), a database for registered manufacturing firms operating in diverse activities and for which data was available for a 6 years period, covering the accounting period 1997-98 to 2002-03. The compan
39、ies qualified for the above two conditions are further grouped into industries based on the classification as listed in the 2003 directory. Thus the data set covers 58 firms from five industry sub-sectors: food and beverages, leather garments, paper products, prefabricated metal products and wood fu
40、rniture. This has given a balanced panel data set of 348 firm-year observations for a sample of 58 firms. For the purpose of this study, profitability is measured by Return on Total Assets (ROTA), which is defined as profit before interest and tax divided by total assets. The operating income measur
41、e of profitability used in the study of Deloof (2003) is not appropriate for this study. The SMEs is characterized by a low fixed assets base and relied to a large extent on accounts payable to fund its gross working capital. Thus a comprehensive measure of profitability is best captured by computin
42、g the return on total assets which is equal to the total liabilities of the firms, made up mainly of equity capital and current liabilities. Some firms have significant fixed financial assets and were thus excluded from the calculation of ROTA. The different analyses have identified critical managem
43、ent practices and are expected to assist managers in identifying areas where they might improve the financial performance of their operation. The results have provided owner-managers with information regarding the basic financial management practices used by their peers and their peers attitudes tow
44、ard these practices. The working capital needs of an organization change over time as does its internal cash generation rate. As such, the small firms should ensure a good synchronization of its assets and liabilities. This study has shown that the paper and printing industry has been able to achiev
45、e high scores on the various components of working capital and this has positively impact on its profitability. On this premise this industry may be referred as the hidden champions and could thus be used as best practice among the SMEs. Further, this research concludes that there is a pressing need
46、 for further empirical studies to be undertaken on small business financial management, in particular their working capital practices by extending the sample size so that an industry-wise analysis can help to uncover the factors that explain the better performance for some industries and how these b
47、est practices could be extended to the other industries. This would also assist policy-makers and educators to identify the requirements of, and specific problems faced by small firms in Mauritius, especially as more emphasis is placed on the sector by the government. This study has come at an oppor
48、tune time where the Mauritian government is deploying resources to help the SME sector so that the latter can positively contribute to the Mauritian economy. This analysis has been constrained by the sample size and the nature of the data, which could have well affected the results. Further studies
49、will aim at increasing the sample size for still better and consistent panel estimates. 译文 营运资金管理及其对企业业绩的影响：分析毛里求斯小型制造企业 资料来源 :国际商务研究综述论文第 2 期 ， 2006 作者： Kesseven Padachi 一个公司 维持流动性 和盈利 的 同时 必须保持其与 日常业务 之间的平衡 。流动性是一个以确保公司能够满足其短期债务 同时 继续保证流量可从企业获利 的先决条件。 现金继续作为财务健康中的重要指标主要是它在业务范围内起着关键作用，这种看法不足为奇。 这就要求企业 的 运行必须 既高效又有 利 可图 。在这个过程中，资产负债不匹配，可能会出现公司短期内的盈利 增加 ，但 是也有破产的风险。另一 方面，对流动性 的 过分注重将 会 牺牲盈利能力， 这是金融教科书 （ 例如 Gitman（ 1984） 和 Bhattacharya（ 2001） ） 营运资金章节开始时经常会出现的内容，权衡风险和回报替代固有的营运资金政策的讨论 。 因此，一个企业实体管理 者 是在实现流动性和收益之间预期的 平 衡， 从而达到企业价值最大化目的。 小企业被视为是健康和充满活力的经济基本要
