Econometric modeling in management of small-sized enterprise

• Published in: Microeconometrics in Business Management pp. 119 - 149
• Main Author: Wisniewski, Jerzy Witold
• Format: Book Chapter
• Language: English
• Published: United Kingdom John Wiley & Sons, Incorporated 2015; John Wiley & Sons, Ltd
• Subjects: debt recovery efficacy; econometric modeling; enterprise; financial liquidity; financial management; small‐sized enterprise
• DOI: 10.1002/9781119154136.ch5
• ISBN: 9781119096801; 1119096804

This chapter uses three measures of a small‐sized company's liquidity. The first of these measures is the difference between the cumulated monthly cash inflows and the cumulate of the finished ready‐made production. An alternative measure of the cumulated monthly financial liquidity is the relative measure of this liquidity for the current production. Next measure of a small‐sized company's financial liquidity is the ratio of cumulated cash inflows and cumulated finished production's value. A simple statistical method of analyzing financial liquidity presented in the chapter can be widely and easily used in a small‐sized manufacturing enterprise. Successful debt recovery settles the level of the company's financial liquidity and determines feasibility of the production process. The practice of short‐term financial management in a small‐sized enterprise forces simultaneous control of its financial liquidity as well as of its debt recovery efficacy. Improvement of the debt recovery efficacy causes the company's better financial liquidity.