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Working Capital Management Practices of Microenterprises in Lipa City as Predictors of Business Sustainability

Volume: 104  ,  Issue: 1 , July    Published Date: 15 July 2022
Publisher Name: IJRP
Views: 85  ,  Download: 34 , Pages: 1216 - 1236    
DOI: 10.47119/IJRP1001041720223596

Authors

# Author Name
1 Joel T. Mostiero

Abstract

Working capital management practices (WCMPs) are fundamental to any business operation to maximize operational efficiency, ensure optimum profitability, and achieve business sustainability. However, there was a clear gap in the literature that linked WCMPs to business sustainability with its three dimensions of performance - economic sustainability (ES), social sustainability (SS), and environmental sustainability EnvS. Thus, this study investigated the working capital management practices (WCMPs) including cash management practices (CMPs), accounts receivable management practices (ARMPs), inventory management practices (IMPs), and accounts payable management practices (APMPs), and their significant effects on ES, SS, and EnvS in 85 selected registered food microenterprises in Lipa City, Batangas. The results revealed that APMPs have a positive and significant effect on ES and SS while IMPs have a positive and significant effect on EnvS. Focusing on food microenterprises, the study also provided evidence that APMPs and IMPs play a profound impact on economic, social, and environmental sustainability. Therefore, this study proposed accounting processes, frameworks, and inventory management tools to optimize APMPs and IMPs as strategies to achieve business sustainability for food microenterprises.

Keywords

  • working capital management practices
  • business sustainability
  • economic sustainability
  • social sustainability