Liquidity Management of SME Financial Essay
Liquidity is critical for small businesses, but studies on liquidity management in SMEs are lacking. This study examines the firm-level determinants of liquidity of small and medium-sized enterprises and SMEs. SMEs have made a significant contribution to the rapid economic growth and industrialization process in the world. SMEs play an important role in the Turkish economy and the main problem of SMEs is financing. The results of the pooled regression analysis showed that there is a significant effect of liquidity management on the profitability of selected SMEs. Furthermore, the result also showed a negative relationship between the measures of profitability, net profit margin, return on assets and return on capital employed and the current explanatory variables. Informal finance is a crucial financing method for small and micro enterprises, SMEs, in most developing countries. Interest rate risks IRS should be an essential part of SMEs, informal financing strategies IFS and public health emergencies as COVID-19 is likely to change IFS due to increased liquidity risks for SMEs. This article, Financial Management in SMEs, is an important aspect that affects their growth, sustainability and competitiveness. The article starts by defining SMEs and highlighting their importance.