Content uploaded by Saman Bandara
Author content
All content in this area was uploaded by Saman Bandara on Dec 25, 2016
Content may be subject to copyright.
Content uploaded by Saman Bandara
Author content
All content in this area was uploaded by Saman Bandara on Dec 25, 2016
Content may be subject to copyright.
ICME 2016, Faculty of Management and Finance, University of Ruhuna
The Working Capital Management Practices of Small and
Medium Enterprises (SMEs) in Sri Lanka
R.M.S. Bandara
Department of Accountancy,
Faculty of Commerce & Management Studies,
University of Kelaniya
samanb@kln.ac.lk
U.A.H.A. Rathnasiri
Department of Accountancy,
Faculty of Commerce & Management Studies,
University of Kelaniya
hashika@kln.ac.lk
Abstract
Small and Medium Enterprises (SMEs) play an important role in any economy as they are capable of generating
employments, promoting the growth of Gross Domestic Product (GDP), embarking innovations and stimulating all
other economic activities. This sector is said to be the backbone of all developed and developing nations.
The purpose of the study is to explore the Working Capital Management (WCM) practices adopted by Sri Lankan
Small and Medium Enterprises (SMEs) and to study the usage of such practices in prevailing information systems and
financial reporting practices.
The sample of the study is 60 SMEs which are operating their businesses in the manufacturing sector and limited to
the western province in Sri Lanka. The study focused on the main working capital components such as cash, trade
receivable and inventory management of SMEs. Data gathered from a questionnaire was followed by descriptive
statistics to analyze the data in order to examine the said purpose of the study.
The findings revealed that SMEs practice on recording of cash, inventory and accounts receivable but not conducted
in a formal manner. Accordingly the ad-hoc working capital management practices of SMEs’ lead to have an excessive
level of working capital resulting low level of profitability or low level of working capital exposing problems that
disturb day today operations of SMEs. In overall study validated that the adoption of working capital management
practices among Sri Lankan SMEs is low as a result of lack of knowledge and the negative perception of cost benefit
analysis on implementing good WCM practices.
Keywords: Small and Medium Enterprises; Working Capital Management – Receivable, Inventory and Cash
management practices; Sri Lanka
ICME 2016, Faculty of Management and Finance, University of Ruhuna
1. Introduction
Small and Medium Enterprises (SMEs) play an important role in any economy as they are capable of generating
employments, promoting the growth of Gross Domestic Product (GDP), embarking on innovations and stimulating of
other economic activities. This sector is said to be the backbone of all developed and developing nations. The
development of SME sector is paramount important for any country irrespective of their level of development, since
this sector has great potential to generate maximum socio economic benefits to the country with minimum level of
investment.
The SMEs have great potential to mobilize and divert financial resources in the economy, which would otherwise have
been used for consumption purposes instead of investment purposes in rural economies. Further the SME sector
provides value addition in view of greater utilization of indigenous resources of the country. Hence SME sector would
become an important aspect for developing countries as they are generally burdened by poverty and unemployment
problems. (National strategy for small and medium enterprises sector development in Sri Lanka - White paper,
2002). Therefore, it could be argued that Sri Lanka can gain economic benefits by developing the SME sector.
SMEs make up a large part of Sri Lanka’s economy representing 80% of all businesses. These are found in all sectors
of the economy provide employment for persons of different skills, skilled, semi-skilled and unskilled. It is noted that,
10% of industrial establishments fall into the SME group, while in the service sector their share is over 90%. Further
SMEs are an essential source of employment opportunities estimated to contribute about 35% of employment (The
National Human Resources and Employment Policy for Sri Lanka, 2012).
Although SMEs role in the economy is substantial, many of them are face by management problems (Hashim & Wafa,
Small and medium sized enterprises in Malaysia : Development Issues, 2002). These management problems include
financial management, working capital management, human resource management, marketing management,
operations management and strategic management etc. Given that working capital management is one of the key
aspects of the wellbeing and survival of a business, it is a managerial activity concerned with the planning and
controlling of the firm’s financial resources. Therefore good working capital management practices are paramount
important for the wellbeing of SMEs and to strengthen their economic and social contribution.
1.1 Problem Identification
SMEs contribute to the growth of the economy in many ways such as employment generation, new venture
development and opening up new avenues for the growth in the economy. However evidence has been found that
there are many failure of SMEs in Sri Lanka. The Central Bank of Sri Lanka (1998) stated that inadequate capital,
inadequate institutional credit facilities, use of outdated technology, improper accounting techniques, inadequate
sales, promotion competencies and inattentiveness of small businesses are the main problems faced by Sri Lankan
SME sector. These obstacles are resulted from inefficient business administration, lack of experiences in important
business functions mainly in accounting and finance. Several studies highlighted that, poor accounting and financial
management practices as one of the factors contributing to massive failure of SMEs in the short run. Also some early
studies argued that, finance and accounting as one of the twelve competency areas for small business success.
ICME 2016, Faculty of Management and Finance, University of Ruhuna
Management of short term assets and liabilities in SMEs needs a careful investigation since the WCM plays an
important role in the determination of the profitability, liquidity and risk (Smith, 1992). The greater the investment in
current assets lead for the lower risk due to ability of settling short term obligations, but also lower the profitability
obtained, because of the inability to invest in the profitable long term investments. Efficient management of working
capital is a fundamental part of the strategy of any SME that leads to a sustainable growth. Thus working capital
management practices could help Sri Lankan SMEs to plan and control their operations in order to achieve company
goals and the long term success and survival of the businesses (Abeygunasekera & Fonseka, 2012).
According to above problem justification, researcher derived the research problem to study on the Working capital
management practices adopted by SMEs in Sri Lanka.
1.2 Research objective
To identify working capital management practices are used by SMEs in their decision making process.
1.3 Significance of the study
There is a dearth of studies focused on the adoption of working capital management practices for small and medium
enterprises in developing economies like Sri Lanka. This study focused insight into the adoption of different working
capital management practices of SMEs in Sri Lanka. As a result this study will address the empirical gap exists in the
local context.
Having understood, SMEs’ positive impact towards the development on economic growth, many countries are putting
massive efforts to develop this vital sector. In Sri Lanka too, successive governments have taken various steps to
develop SMEs since independence. But the contribution of SMEs to the national economy in Sri Lanka is
comparatively low when compared with the other developed and developing countries in the region. Therefore there
is an urgent need to uplift this sector to promote national policy on SMEs. To have national contribution to the
economy, it is important to study about SMEs in Sri Lanka. This study may provide insight to policy makers regarding
the relevance of working management practices of SMEs.
Most of the research studies had proven that problems related to finance as the critical and foremost reason for
increasing the failure rate of SMEs. The weak financial base may basis to other problems like upgrading of technology,
expansion of production capacity, production efficiency, lack of access to bank facilities etc.
On the other hand, many studies proved the fact that sound working capital management practices not only control
the financial position but also significantly contribute to improve and increase the liquidity and profitability position
of SMEs. These previous conclusions suggest that SMEs should highly regard working capital management and view
working capital management practices as one of the tools to improve the profitability. Thereby, this study has taken
steps to in depth study to identify the applicability of working capital management practices in Sri Lankan SMEs and
in turn it would add value to the pool of existing knowledge.
ICME 2016, Faculty of Management and Finance, University of Ruhuna
2. Literature Review
SMEs have been identified to play a crucial role in the economic development process of both the developed and
developing countries. It is even more important to developing countries as the poverty and unemployment are
burning problems in those economies. SMEs perform a strategic role in Sri Lanka as it accounts for a higher
percentage of the total number of industries and business establishments similarly in other developing countries.
SMEs promote economic growth by import substitution as well as through direct exports, and they mostly supply
goods and services to large directly exporting ventures and thereby contribute towards alleviating balance of payment
difficulties (Hewaliyanage, 2001).
SMEs account for 80% - 90% of the total number of enterprises in Sri Lanka and contribute 30% in terms of value
added and account for 32.7% of the employment from agriculture sector, 26.3% of the employment from Industrial
sector, 41% of the employment from Services sector (National strategy for small and medium enterprises sector
development in Sri Lanka - White paper, 2002). It provides the requirement of enabling environment for the
achievement of a broad based, resilient and internationally competitive SME sector. It has also set in place policies
and programmes to further develop and integrate SMEs with various subsectors of the national economy and global
markets.
2.1 Financial Management
Meredith (1986) defined the financial management as one of several functional areas of management but it is the
central to success of any small business. This definition emphasizes the central role and position of financial
management in relation to the other specific areas of business management.
McMahon et al. (1993) defines financial management based on mobilizing and using sources of funds:
Financial management is concerned with raising the funds needed to finance the enterprise’s assets and
activities, the allocation of these scare funds between competing uses, and with ensuring that the funds are
used effectively and efficiently in achieving the enterprise’s goal.
McMahon et al. (1993), modern financial management involves planning, controlling and decision making
responsibilities embracing:
Various types and sources of finance an enterprise may employ, how these may be accessed, and how to
choose among them.
Alternative ways in which finance raised may be used in an enterprise and how to select those that are likely
to prove most profitable.
Different means of ensuring that finance entrusted to specific activities to realize the returns that were
anticipated on its allocation to them.
2.2 Financial management practices
Financial management practices in SME sector have long attracted the attention of researchers. Depending on
different objectives, researchers emphasize different aspects of financial management practices. (McMahon, Holmes,
ICME 2016, Faculty of Management and Finance, University of Ruhuna
Hutchinson, & Forsaith, 1993) and (McMahon, Financial reporting to financiers by Australian manufacturing SMEs,
1999) summarized their review of financial management practices in Australia, UK and USA. In their review the
context of financial management practices include the following areas.
1. Accounting information systems – the nature and purpose of financial records, book keeping, cost
accounting, and use of computers in financial record keeping and financial management.
2. Financial reporting and analysis – the nature, frequency and purpose of financial reporting, auditing,
analysis and interpretation of financial performance.
3. Working Capital Management – non-financial and financial considerations in asset acquisition, quantitative
techniques for capital project evaluation, investment rate determination and handling risk in an uncertainty
in this context.
4. Financial structure management – financial leverage or gearing, accounting to lenders, knowledge of sources
and uses of finance, non-financial and financial considerations in financial structure decisions and non-
financial and financial considerations in profit distribution decisions.
5. Financial planning and control – financial objectives and targets, cost-volume profit analysis, pricing,
financial budgeting and control and management responsibility centers
6. Financial advice – internal and external sources and types of financial advice and use of public accounting
services.
7. Financial management expertise - informal and formal education, training and experience in financial
management, relevant qualifications and overall financial management expertise.
However the purpose of the study is not to cover all the context of financial management practices as indicated, the
study focused on evaluation of selected working capital management practices adopted by Sri Lankan SMEs.
Researcher used to explore the adoption of cash, receivable and inventory management practices of SMEs.
3. Methodology
Likert scale was used to measure the extent to which SMEs adopt working capital management practices in their day
today operations. As specified in above cash management practices, receivable management practices and inventory
management practices are taken into consideration under the working capital management. Single item scale
questions were asked to measure the extent of adoption of the above mentioned financial management techniques.
According to Jamieson (2004) most reliable measure of central tendency is the median and the mode. Five point
likert scale used in this regard and values are assigned as follows. 1 = Never, 2 = rarely, 3 = sometimes, 4 = often and
5 = always.
3.1 The Sample
Determining the population of SMEs in Sri Lanka is imprecise. The researcher selected the target sample of 60 SMEs
which are operating their businesses in the manufacturing sector and the study is limited to the western province in
Sri Lanka. Among the wide range of enterprises that are functioning in Sri Lanka, the manufacturing sector is an
important economic sub sector because its activities tend to draw support of enterprises in other sectors that produce
or provide inputs and services (National Policy Declaration on Enterprise Development, 2009). Out of all SMEs, 73%
represent manufacturing related enterprises. Further it is noted that within the manufacturing sector SMEs account
ICME 2016, Faculty of Management and Finance, University of Ruhuna
for 96% of industrial units (MED 2002). The western province is selected for the research as more number of
establishments represents the western province (DCS 2009).
Due to the absence of a nationally accepted definition for SMEs and the unavailability of information, researcher
intends to consider about the World Bank definition. Accordingly, there are three bases to classify SMEs namely,
Micro, Small and Medium. i.e. based on employment, total assets and total annual sales. Out of the World Bank
definition, researcher considered only the employment base to define SME for the study purpose. Employment base
is the most widely used measure of size in quantitative definitions of small enterprises around the world (McMahon et
al. 1993). Accordingly, the researcher uses the following definition for SMEs demarcating micro, small and medium
enterprises.
Micro - Up to 10 employees
Small - Up to 50 employees (10-50)
Medium - Up to 300 employees (50-300)
Considering the availability of up to date information of SMEs, reliability of data and number of years establishment
of database, researcher intends to select the database belongs to the Ministry of Industry and Commerce (MIC).
3.2 Data Collection
Data were collected through a structured questionnaires sent to the manufacturing sector SMEs which have been
registered in the MIC and conduct their operations within the limits of western province. The considered registration
period in MIC is from year 2008 to 2013.
The sample was limited to 60 respondents after screening out through a pilot survey. They were individually
contacted and asked whether they were interested in participating to the study elaborating the intention of the study.
The Sample has selected from MIC database within the period of registration from year 2008 to 2013. It has collected
by using disproportionate stratified random sampling design by using Statistical Package for Social Science (SPSS)
software (PASW 18). The population of manufacturing SMEs segregates into three different strata namely Colombo,
Gampaha and Kalutara.
Table 1 : Selected sample of the study
Colombo
Gampaha
Kalutara
Total
Register in MIC
170
76
25
271
Target sample
50
35
15
100
Selected sample
26
19
15
60
Source: Author compiled
ICME 2016, Faculty of Management and Finance, University of Ruhuna
3.3 Operationalization of Variables
(a) Cash management
Cooley & Pullen (1979) reported on the cash management practices of 122 small businesses in petroleum marketing.
In their survey, cash management consisted of three basic components: cash forecasting, investing temporary cash
surplus and controlling cash inflows and outflows. Anvari & Gopal (1983) conducted a study to gain insights into how
small Canadian firms manage their cash resources. They used five indicators: cash forecasts, cash balance, basis for
determining cash balance and cash surplus investment to measure cash management practices. Burns & Walker
(1991) used the following indicators to measure practices of cash management: the interval of time for cash budgeting
(daily, weekly, monthly, quarterly, semi-annually, annually or never), techniques used to determine the target balance
and the forms of idle cash investment for profitable purpose.
Based on the above empirical studies, researcher focuses on cash forecasts, determination of target cash balance and
tools that used to invest the temporary cash surplus.
(b) Receivable management
Pell & Wilson (1996) examined the working capital management and capital budgeting practices of a sample of small
firms based in the North of England. In their survey, respondents were requested to indicate the frequency with which
they reviewed their debtors’ credit period, debtors’ discount policy, bad and doubtful debts. In this research,
receivable management was measured by extent of reasonability of debtors’ credit period, bad and doubtful debts.
(c) Inventory management
According to the study of working capital management of SMEs, main focus has gone towards the reviewing of stock
turnover, stock levels, stock re-order levels and the usage of economic order quantity model (Pell & Wilson 1996).
Considering these factors to determine the inventory levels, frequency and reasonableness of inventory levels and
inventory budgets preparation are the main focus in this study.
4. Data Analysis, Results and Discussion
4.1 Cash management practices
Table 2: Planning for cash needs and its consequences
N
Median
Mode
Minimum
Maximum
Valid
Missing
Preparing cash budget
60
0
4
5
2
5
Determine the expected cash balance
60
0
4
4
2
5
Occurrence of cash shortages
60
0
3
3
2
4
Occurrence of cash surpluses
60
0
3
3
1
3
Source : Author Compiled
Median, mode, minimum and maximum values are presented in table 2 in order to measure how SMEs planning for
cash needs and their consequences. For the preparation of cash budget and determination of expected cash balance,
ICME 2016, Faculty of Management and Finance, University of Ruhuna
both the median and mode were denoted four (4) and five (5) values. Those values exemplified that there is high
tendency and concerned about the preparation of cash budget and determining the future cash flows among the SME
businesses. On the other hand consequences of cash management practices, i.e occurrence of cash shortages and
surpluses are at the value three (3) for both the median and mode. This indicated that though SMEs consider about
the cash budget preparation and deterimining the expected cash balance, cash consequences out of them is at the
moderate level in Sri Lankan SMEs. Further it means there are chances to occur cash surpluses and shortages.
Table 3 : Where does the SMEs often invest the temporary cash surpluses
Investment of temporary
cash surplus
Frequency
Percentage
Bank Deposit
37
61%
Treasury bills
1
2%
Any other
1
2%
Not in any
21
35%
Total
60
100%
Source : Author Compiled
Table 3 shows the various financial securities that SMEs invest their temporary cash surpluses. The highest pecenatge
of 61% denotes that, majority of SMEs in the selected sample, invest temporary cash surplus in a bank account rather
thinking about profitable investment opportunities. There is no any respondents mentioned about the share market
investment though it was among the questions, the share market as one option of investment. Thus there is less
tendency of Sri Lankan SMEs to invest in money market instruments such as tresury bills, commercial papers etc. Out
of the sample 35% of businessess do not invest their temporary cash surplus in any of the investment options.
Findings revealed that few SMEs that have cash surplus, do not invest in marketable securities in order to generate
more income and this practice hinders their growth prospects and eventually leads to their failure as indicated in
earlier studies (Peacock 1985).
It symbolized the fact that governemnt authorities need to pay their attention on educating SMEs through the
awareness programmes about variety of profitable investment options.
Though the SMEs practiced to do the determination of expected cash balance, findings further revealed that 70% of
SMEs determined the cash balance based on the owner/manager’s experience. This suggests that experience is viewed
as more important than theories in practicing cash management. The earlier researches conducted also showed that
one of the most significant reasons behind the failure of SMEs is poor cash management and inadequate use of
essential business and management practices (Tushabomwe Kazooba 2006, Abanis et al. 2013).
4.2 Receivable management practices
On receivable management practices, respondents were asked questions concerned with credit sales, credit policies,
percentage of bad debts compared with sales. Under inventory management practices, respondents were asked
questions related to determination of inventory levels, preparation and review of inventory budget. Below are
descriptive findings of receivable and inventory management practices of SMEs in the sample.
ICME 2016, Faculty of Management and Finance, University of Ruhuna
Table 4: Sales on credit and credit policies
No. of firms
Percentage
Sell products on credit
Never
1
1.7
Rarely
2
3.3
Sometimes
23
38.3
Often
27
45.0
Always
7
11.7
Total
60
100%
Disclose the credit policy to customers
Never
3
5.0
Rarely
1
1.7
Sometimes
26
43.3
Often
24
40.0
Always
6
10.0
Total
60
100%
Source : Author Compiled
It is important to note that trade credit is particularly important in the case of small and medium enterprises, since
trade debtors are the main asset on their firm’s balance sheets (Abanis et al. 2013). Table 4 demonstrated that more
than 90% of respondents sell their products on credit basis and also disclose the credit policy to customers. Only 2%
of SMEs never use credit sales to their customers. There is high tendency of SMEs do their sales on credit basis and
transparent about the credit policy to customers. Further median and mode values are calculated to measure the
receivable mangement practices of SMEs. Both median and mode values denote three (3) and four (4) relating to sales
on credit and credit policies. It further emphasis that SMEs are practiced to do credit sales and transparent of their
credit policy to customers.
Table 5: Percentage of bad debts compared to sales
No. of firms
Percentage
Less than 5% of sales
12
20
5 - 10% of sales
16
26.7
10 - 20% of sales
32
53.3
60
100%
Source : Author Compiled
The findings from Table 5, clearly showed the extent of accounts receivable management among SMEs is low. More
than 50% of SMEs maintain the credit level around 10-20% of sales. When analysing the percentage of bad debts to
sales, 47% of responding SMEs indicated that their bad debts have not exceeded 10% of sales. The results revealed
that though SMEs maintain set credit policy in place of control the sales to be made on credit, sales are just made t o
customers without vetting who should be granted credit and how much credit should be granted. This is further
supported by the high levels of bad debts and difficulty that SMEs faced in recovery of the money from credit sales.
ICME 2016, Faculty of Management and Finance, University of Ruhuna
4.3 Inventory management practices
Respondents were asked likert scale questions related to preapring and reviewing of inventory budget and
determination of inventory level of the business. Below are descriptive findings of inventory management practices of
Sri Lankan SMEs.
Table 6: Preparation of inventory budget and review of inventory levels
N
Median
Mode
Minimum
Maximum
Valid
Missing
Review inventory levels
60
0
3
3
2
5
Prepare inventory budget
60
0
3
4
1
4
Source : Author Compiled
Median, mode, minimum and maximum values are presented in table 7 to understand preparation of inventory
budeget and reviewal of inventory levels in Sri Lankan SMEs. Both median and mode values were (3) and (4) for the
inventory budget preparation. These values indicated that Sri Lankan SMEs are used to practice the inventory budget
preparation upto greater extent. When asked how they determined the level of inventory in preparing inventory
budget, more than 50% of responding firms answered that they determined inventory level based on owner/
manager’s experience, only 5% used theories on inventory management. When researcher asked about the ‘Economic
order quantity model’ in inventory management, majority of private limited businesses revealed that they aware
about such models but practical application was at a minimal level. Both median and mode values represented (3) as
the reviewal of inventory levels by SMEs. The results demonstrated that inventory management practices among Sri
Lankan SMEs are relatively low indicating that they are less adoption of quantity of inventory to bring in, when to
restock etc. This poses a big challenge since it ties up the working capital of the business. The findings are in
agreement with previous scholar (Tushabomwe Kazooba 2006), where his findings indicated that there was almost
none if not little inventory mangement practices among SMEs in Western Uganda.
5. Conclusion and Recommendation
Working capital management (WCM) is vital and an integral part in the financial management which affects the
profitability, liquidity, risk as well as the value creation of a business.
The objective of the study was to investigate the adoption of working capital management practices of SMEs. In line
with the objective. The results showed that Sri Lankan SMEs were familiar with using cash budget as a tool to plan
and control cash flows of the business. But findings revealed the fact that most of the SMEs determined the cash
balance based on the owner/manager’s experience. This suggests that experience is viewed as more important than
theory in practicing cash management. Most of the SMEs utilize bank deposit as the mode of investment to invest the
temporary generated cash surpluses of their businesses and 35% of did not know how to use temporary cash
surpluses on profitable investment options. The high cash balance that the SMEs have to keep is acceptable under
conditions of uncertainty in the business environment. On the other hand businesses should maintain a trade-off
between liquidity and profitability. Sri Lankan SMEs pay less attention on invest in money market instruments such
as treasury bills, commercial papers etc. Thus it is recommended government authorities to make Sri Lankan SMEs
aware about variety of profitable investment opportunities.
ICME 2016, Faculty of Management and Finance, University of Ruhuna
This is a clear indication that though SMEs prepare cash flow statement and maintain cash budget, Sri Lankan SMEs
manage their cash in an adhoc basis, without based on any theory. The budgets are not reviewed regularly to match
with the current operations. This may probably the major reason why a number of SMEs experience cash shortages as
shown in the findings.
Findings of the receivable management practices suggested that selling products on credit basis was a common trend
in Sri Lankan SMEs. As a consequence, receivable management practices become extremely important and reviewing
levels of receivables and proper control over write offs of bad debts. Because the expenditure in the form of bad debts,
reduces the profitability of SMEs and thus affecting the overall going concern.
Inventory management practices demonstrated that Sri Lankan SMEs often reviewed inventory levels and prepare
inventory budget, but the ability to apply theories of inventory management in inventory budgeting was very limited.
Majority of SMEs determine the inventory levels, based on owner/manager’s experience. Like cash management, the
owner’s or manager’s experience found to be more important than application of theories of inventory management.
The study demonstrated that the adoption of working capital management practices among Sri Lankan SMEs is low.
Thus it is important to provide platform for training SME owners on how to adopt and implement working capital
management practices particularly on cash management practices since cash is the life blood of every business so as
to ensure long term survival of SMEs. Also SME owners should be advised to strengthen and put up policies regarding
debtors on how to collect receivables, be able to know when to write off bad debts so as to minimize losses tha t accrue
as a result of non- payment.
Further there is an importance to create entrepreneurial path within the general and vocational education system.
Although the economic context in Sri Lanka moves towards in favour of entrepreneurship, the socio-cultural context
needs further changes to give impetus to entrepreneurship. The changes have to be initiated from primary level
education as the need for achievement, independence and perseverance has to be created at the early stages among
the youth population to lay the foundation for creativity and innovation.
References
Abanis, T, Sunday, A, Burani, A & Eliabu, B 2013, 'Financial Management Practices in Small and Medium Enterprises
in selected districts in Western Uganda', Journal of finance and Accounting, vol 04, no. 02, pp. 1-15.
Abeygunasekera, AWJC & Fonseka, AT 2012, 'Non-compliance with standard accounting practices by small and
medium scale enterprises in Sri Lanka', Postgraduate Institute of Management, University of Sri Jayawardenepura,
Sri Lanka.
'Annual report' 1998, Central Bank of Sri Lanka, Sri Lanka.
Anvari, M & Gopal, VV 1983, 'A survey of cash management practices of small Canadian firms', Journal of Small
Business Management, pp. 53-58.
Belt, B & Smith, K 1992, 'Recent changes in working capital management practices', Midwestern journal of Business
and Economics, vol 07, no. 01, pp. 1-18.
Burns, R & Walker, J 1991, 'A survey of working capital policy among small manufacturing firms', The journal of
small business finance, vol 01, no. 01, pp. 61-74.
Cooley, P & Pullen, R 1979, 'Small business cash management practices', American Journal of Small Business , vol
04, no. 02, pp. 1-11.
ICME 2016, Faculty of Management and Finance, University of Ruhuna
DCS 2009, Census and Statistics in Sri Lanka, Final Report ‘Principal indicators of industrial activity classified by
district’, Department of Census and Statistics, Sri Lanka.
Hashim, M & Wafa, S 2002, 'Small and medium sized enterprises in Malaysia: Development issues', Prentice
Hall,Malaysia, Kuala Lumpur.
Hewaliyanage, R 2001, 'Export Orientation for small and medium enterprises’ policies, strategies and programmes',
country paper, Asian productivity organization, Tokyo,Japan.
Jamieson, S 2004, 'Likert scales: how to (ab) use them', Medical Education , vol 38, pp. 1212-1218.
McMahon, R, Holmes, S, Hutchinson, P & Forsaith, D 1993, Small enterprise financial management: Theory and
Practice, Harcourt Brace, Sydney.
McMahon, R 1999, 'Financial reporting to financiers by Australian manufacturing SMEs', International Small
Business Journal, vol 18, no. 01, pp. 35-52.
MED 2002, 'National strategy for small and medium enterprises sector development in Sri Lanka', White paper,
Ministry of Enterprise Development, small and medium enterprise sector development programme.
Meredith, G 1986, Financial management of the small enterprise, McGraw Hill, Sydney, New South Wales.
National Policy Declaration on Enterprise Development, an Enterprising Nation in the Twenty First Century, July
2009.
Peacock, R 1988, 'Small business bankruptcy', Accounting Forum, vol 01, no. 03, pp. 51-52.
Pell, M & Wilson, N 1996, 'Working capital and financial management practices in the small firm sector',
International Small Business Journal , vol 04, no. 02, pp. 52-68.
Secretariat 2012, 'The National Human Resources and Employment Policy for Sri Lanka', Secretariat for Senior
Ministers, with technical and financial support by the International Labour Organisation
Tushabomwe Kazooba, C 2006,Causes of small business failure in Uganda: A case study from Bushenyi and
Mbarara Towns, vol 8, no. 4.
