| Original language | English |
|---|---|
| Journal | Construction Innovation |
| DOIs | |
| Publication status | Published (VoR) - 12 May 2022 |
Funding
Every profit-making corporate establishment needs to maintain an appropriate level of funds for successful operations in the short, medium and long term, as well as to boost corporate performance (; ). Irrespective of the long-term goal of maximizing profit, which is usually supported by both capital structure and capital budgeting of an organization, the short-term operating requirement in support of the WCM concept is critical (). Simply, the survival of every firm in the short term depends on the management of its working capital (WC) ceteris paribus (). WC are the financial resources that companies need to perpetuate the day-to-day (short-term) operations of the business (). Without cash to pay present expenses, firms go bankrupt; no matter how much income may be owed to them or coming down the line. Thus, the success of businesses meeting their short-term financial obligations is the basis of WCM principles (; ; ). Consequently, every business must operate with a sufficient financial cushion to ensure smooth business continuity – paying for resource supplies ahead of receiving payments for services or products delivered. This challenge is particularly acute in the short run (). In a recent study, found that improvements in WCM substantially boost performance metrics, such as return on equity (ROE). Given that the differential between outgoing payments and incoming revenue receipts is particularly dynamic and variable in the CI, WCM in the construction domain is especially challenging, requiring careful management and further research investigation.
Keywords
- Construction industry
- Project management
- Working capital management