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Synopsis on Working Capital Practices

In: Business and Management

Submitted By naamii
Words 797
Pages 4
Synopsis on:
Comparing working capital practices in Canada, The United States, and Australia

Introduction:
The survey is done by Nabil T.Khoury, Keith V.Smith, Peter I. MacKay. This survey was motivated by the desire to understand how working capital is managed by smaller firms in Canada.This includes the management of current assets and current liability accounts, as well as the working capital of the firm in aggregate.
Research Methodology:
They used a survey instrument that was used in three earlier comprehensive surveys (U.S. 1978, U.S. 1988, Australia 1989) of working capital practices. We ended up with 18 questons that are comparable across four surveys spanning two decades and three countries, wihich enables us to see how working capital practices have varied over time and across international bodies.
Objectives:
• To have better understanding on how working capital is managed by smaller firms in Canada.
• To provide useful perspective for considering future research directions in working capital management through these comparison.
Research design:
The first comprehensive survey of working capital practices was conducted in 1978(Smith & Sell,1980). The survey instrument used consisted of 35 questions.From a sample of 653 of the largest U.S. industrial firms, 210 were usable, for 32.2% response rate. The survey was replicated a decade later in 1998(Belt & Smith, 1992). The survey instrument was expanded to 38nquestions and sent to a sample of 448 of the largest u.s. industrial firms.There were 105 usable responses,for a 23.4 % response rate.using the same instrument, the survey was replicated in Australia in 1989.The sample consisted of 144 of the largest Australian firms and there were 39 usable responses, for a 27.1 %response rate. To learn how smaller Canadian firms manage their working capital, they expanded the survey instrument to 4...

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