<abstract xml:lang="en" xmlns="http://www.w3.org/1999/xhtml"><p>Collection period is the length of time taken by a company's credit customers to pay their debts. During this time, company resources are tied up as it is effectively financing its customers' purchases out of its own funds. Credit collection period is, therefore, an important factor that might have an impact on the cash flows, and hence, the survival of a company. An attempt has been made in this paper to explore the profile of credit collection period among small and medium-sized manufacturing enterprises in Malaysia. Besides that, we also identify some determinants of this credit collection period. The study is based primarily on secondary data derived from financial statements of manufacturing SMEs from 2001 through 2004. The findings of this study indicate that liquidity, efficiency, profitability, industry sub-sector and size have some influence over the credit collection period.</p></abstract>

Collection period is the length of time taken by a company's credit customers to pay their debts. During this time, company resources are tied up as it is effectively financing its customers' purchases out of its own funds. Credit collection period is, therefore, an important factor that might have an impact on the cash flows, and hence, the survival of a company. An attempt has been made in this paper to explore the profile of credit collection period among small and medium-sized manufacturing enterprises in Malaysia. Besides that, we also identify some determinants of this credit collection period. The study is based primarily on secondary data derived from financial statements of manufacturing SMEs from 2001 through 2004. The findings of this study indicate that liquidity, efficiency, profitability, industry sub-sector and size have some influence over the credit collection period.

Manufacturing SMEs' Credit Collection Period and its Determinants: Some Evidence from Malaysia

Folia Oeconomica Stetinensia

Collection period is the length of time taken by a company's credit customers to pay their debts. During this time, company resources are tied up as it is...

Manufacturing SMEs' Credit Collection Period and its Determinants: Some Evidence from Malaysia

Pubblicato online: 21 dic 2011

Pagine: 83 - 104

DOI: https://doi.org/10.2478/v10031-010-0011-9

Parole chiave
trade credit, collection period, SMEs

This content is open access.

Manufacturing SMEs' Credit Collection Period and its Determinants: Some Evidence from Malaysia

Pubblicato online: 21 dic 2011

Pagine: 83 - 104

DOI: https://doi.org/10.2478/v10031-010-0011-9

Parole chiavetrade credit, collection period, SMEs

This content is open access.

Parole chiave
trade credit, collection period, SMEs