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

Abstract

This study determined the extent to which working capital requirements influence management of financial obligations in medium size businesses in Akwa Ibom State. Two research questions and two null hypotheses guided the study. Descriptive survey research design was used in the study. The population of the study comprised 247 managers of medium scale enterprises in Akwa Ibom State. Simple random sampling technique was used to draw a sample of 152 respondents from the population. A validated 40-item structured questionnaire was used for data collection. Cronbach Alpha method was used in determining the reliability of the instrument and a correlation coefficient index of 0.82 was obtained. Simple linear regression was used to answer the research questions and to test the null hypotheses at .05 level of significance. Findings revealed among others that nature of business and business size have high influence on management of financial obligations in medium size businesses in Akwa Ibom State. Based on the findings, it is concluded that the nature and size of a business are critical determinants of how financial obligations are managed in medium size businesses and that strategic financial management must consider these factors to ensure sustainability and growth. It was recommended that Managers should ensure that financial management is aligned with the business nature while strengthening cash flow management.