Working Capital Requirements and Management of Financial Obligations in Medium-Size Businesses in Akwa Ibom State

Abstract

This study was conducted to determine the extent to which working capital requirements influence management of financial obligations in medium size businesses in Akwa Ibom State. Two research questions were answered and two null hypotheses were tested at .05 level of significance. Related literature and empirical studies were reviewed. A descriptive survey was used in the design of the study. The study area was Akwa Ibom State. The population of the study comprised 247 managers of medium scale enterprises in Akwa Ibom State. Simple random sampling technique was used in selecting a sample of 152 managers of medium scale enterprises in Akwa Ibom State. The researcher- developed 40-item structured questionnaire was used for data collection. The questionnaire items were face-validated by three research experts. Cronbach Alpha method was used in determining the reliability of the instrument and a correlation coefficient index of 0.82 was obtained which showed that the instrument was reliable. Data were analyzed using simple linear regression to answer research questions and to test the null hypotheses. The findings of the study indicated that nature of business and business size have high influence on management of financial obligations in medium size businesses in Akwa Ibom State. The study concluded that nature of business and business size significantly influence management of financial obligations in medium-size businesses in Akwa Ibom State.  It is recommended that Managers of business organizations should implement a cash flow forecasting system to anticipate and manage financial obligations.