Naslov
Liquidity management in small companies

Autori
Stojanović, Slobodan ; Penava, Ivan

Vrsta, podvrsta i kategorija rada
Radovi u zbornicima skupova, cjeloviti rad (in extenso), znanstveni

Izvornik
Interdisciplinary Management Research VII / Bacher, Urban ; Barković, Dražen ; Dernoscheg, Karl-Heinz ; Lamza-Maronić, Maja ; Matić, Branko ; Pap, Norbert ; Runzheimer, Bodo - Osijek : Ekonomski fakultet Sveučilišta Josipa Jurja Strossmayera u Osijeku, 2011, 326-336

ISBN
978-953-253-096-4

Skup
Interdisciplinary Management Research VII

Mjesto i datum
Poreč, Hrvatska, 13.05.2011. - 15.05.2011

Vrsta sudjelovanja
Predavanje

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
liquidity and cash management, small enterprises, cash budgeting

Sažetak
Liquidity management is one of the main financial management tasks of the companies, which must be executed efficiently and methodically in everyday business environment. The liquidity can be defined as the ability of an asset or its part to be converted into cash, quickly and without any price discount, in the amount sufficient to fulfill company due liabilities. The importance of the liquidity position is especially noticeable in today’s business circumstances where effects of post- global financial crisis are still widely felt. Managing and maintaining favorable and optimal liquidity situation in order to realize main business objectives is particularly important for small enterprises that are confronted with strong pressures on its profitably and existence from bigger companies and other competitors alike. Due to their size, small companies don’t have financial strengths and sufficient reserve funds that could be tapped to overcome negative and unplanned business developments over the long run. Therefore, different factors that are influencing their business activity, such as sudden particular and/or general fall in products and services demand, an increase in uncollected receivables, inflationary pressures, price increases of specific raw materials and other inputs, “frozen” credit markets and other unfavorable business conditions, results in negative cash flow dynamics, thus threatening liquidity and survival of the company. In order to avoid negative liquidity trends, small companies must pursue strong liquidity management, which in turn requires strict and systematic financial planning of cash flows in certain period of time. Effective cash flow management should secure the ability of the small company to pay its liabilities on time as well as to recognize potential financial risks in the future period and prepare adequate measures to react accordingly. There are different methods and tools that can be used in liquidity management and planning, such as cash budgeting, management of net working capital, cash-gap management and others. Usage of these liquidity management techniques would help and support small company business operations as well as prevent adoption of poor decision that could have lasting negative consequences, especially in economies faced with not so positive prospects. Therefore, the aim of this paper is to present basic liquidity management techniques that small companies have at their disposal and their implementation in everyday business operations.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA