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

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.

Assessment on the Implementation of Barangay Micro Business Enterprises Act of 2002 Relative to the Profitability of Food Businesses in Victoria, Laguna

“…Indeed, they are critical for the growth and sustainability of BMBE food businesses. Mostiero discovered that monitoring and evaluation are essential for improving the performance and competitiveness of registered BMBE food firms (Mostiero, 2022). According to the study's findings, M&E enables entrepreneurs to identify their strengths and weaknesses and make necessary modifications to their operations.…”