Assessing Working Capital Management of SME'S in London (Thesis Proposal Sample)

TOPIC: ASSESING WORKING CAPITAL MANAGEMENT OF SMES IN LONDON
1.1 RATIONALE OF STUDY
Working Capital Management (WCM) is a component of corporate finance that deals with the short-term management of investment and financing choices. It entails keeping working capital components including cash, receivables, payables, and inventories at optimal levels (Kayani et. al, 2019). Working Capital Management is significant since it determines the scope of a company's connection with its customers and suppliers. The goal of Working Capital Management (WCM) is to maintain levels that maximize profitability, therefore it is up to businesses to ensure that the target levels of WCM set are appropriate and practical in order to maximize profitability (Afrifa, 2015).
Small and medium-sized enterprises (SMEs) play an important role in a country’s economic development by creating jobs and contributing to gross domestic product (Burgstaller and Wagner, 2015 as cited by Barker et. al, 2019). SMEs invest enormous sums of money in working capital and have significant short-term payables, both of which have a negative impact on the business's sustainability and growth if not properly managed (Baker et al, 2019). Furthermore, because most SMEs lack long-term assets such as buildings and cars, their assets are largely current-inventory, receivables and cash and they rely mostly on short term debt (Baker et. al, 2019). Failure to efficiently manage working capital may result in the failure of the firm.
Two advantages are typically correlated with methods in working capital management, and at the end of this study, SMEs are expected to benefit