The Turnover Cycle of Capital in Small and Medium-Sized Enterprises from the Construction Sector Listed on Newconnect

Abstract

The dynamics of small and medium-sized enterprises play a key role in the development of the Polish economy. These entities are essential for the sustainable functioning of the economy, allowing one to benefit from the effects of the dynamic development of future generations. In the first part of the article the diagnostics on the liquidity of a company is presented. Then liabilities turnover, receivables turnover cycle and inventory turnover cycle are briefly characterized. In the second part of the article issues concerning cash management are discussed. Proper capital management is a major media to a company and added value because it improves efficiency and contributes to the proper planning in terms of financial requirements and the rational obligations incurred. The third part of the paper verifies the effectiveness of usability indicators to determine the time length of the cycle. Using the indicators discussed a company obtains information about the levels of cash to enable it to minimize maintenance costs.