IMPACT OF WORKING CAPITAL MANAGEMENT ON THE PERFORMANCE OF SMALL-SCALE BUSINESSES IN ABUJA

Abstract

This study examined the impact of Working Capital Management on the performance of small-scale businesses in Abuja. This study made use of quantitative approach because it involves collecting and analysing numerical data and also enables researchers to test the significance of the relationship between Working Capital Management and performance of Small-scale Businesses. The population of the study is 500 of small-scale business in Abuja which consist of block – making industry, bakeries and packaged water production companies. A structured questionnaire was used because they are easy to administer to the sample size of 110 small businesses. A correlation and linear regression was used to analyse the data. The study therefore concludes that cash management practice, trade credit management practice and trade inventory management practice has significant impact on of the performance of small-scale businesses in Abuja. The study therefore recommends that; SMEs should prioritize good cash management strategies by implementing relevant policies such as banking, investing, budgeting, and cash requirement planning; to lower the expenses of bad debts and debt administration, SMEs must establish a flexible trade credit policy and conduct extensive credit vetting and managers should focus more on proper inventory management by establishing certain standards that will aid in keeping inventory at an ideal level.