Abstract
M.Com. (Financial Management)
Working capital management (WCM) is considered critical for the success of all
business and especially for small businesses. A recession (such as the one that took
place in 2009) complicates the working capital management of small businesses.
Working capital management of a sample of small and medium enterprises in South
Africa were investigated to determine how they manage their working capital during
challenging economic conditions. The impact of the 2009 economic recession on
WCM was specifically investigated by following a quantitative descriptive research
approach. The study sample consisted of 44 companies listed on the JSE Ltd AltX
Index. A trend analysis was applied on WCM variables to determine significant changes overthe study period. Because variables were not normally distributed, the Mann Whitney
U test was conducted to determine the statistical significance of the WCM mean ranks
pre-, during and post-recession phases. The trend analysis of working capital
management over the six-year study period exhibited a significant improvement in the
working capital management level during the economic recession. This was largely
attributed to delaying payment to creditors.
The analysis of the WCM variables pre-, during and post-recession phases indicated
that there were no significant changes in WCM that can be attributed to the 2009
economic recession.
It was concluded that although there were changes in working capital management
over the study period, the changes could not only be attributed to the 2009 recession.