WORKING CAPITAL MANAGEMENT AND FINANCIAL SUSTAINABILITY PERFORMANCE ANALYSIS IN SMES

The idea of this research is to find out if the hypothesis about the impact of operating working capital management on business financial sustainability and, eventually, profitability is verified in the market of small and medium Italian companies. This analysis is empirical, being developed through a validation carried out directly on the data of the companies included in the sample. In order to give relevance to the data resulting from this process, 3,272 observations were collected, relating to 409 companies for a period of 8 years. The originality of this research lies both in the country taken as a reference (Italy), but also in the deepening of SMEs, since in most scientific papers about the topic, the focus is on a pool of listed companies. The methodology is based on the analysis of SMEs belonging to three production sectors. This was done in order to avoid that average data did not take account of specificities - something that would have reduced the possibility of producing comments - so to find a measure of synthesis for all the variables of working capital and the business cycle. A scoring mechanism has been created which, on the basis of the main indicators of working capital management, attributes a real evaluation to each company taken into consideration, for each of the years of the time horizon. The statistical correlation analyses are then carried out by comparing the score obtained and the main profitability indicators, i.e. ROA, ROI, ROS, ROE and an indicator of financial sustainability as PFN/EBITDA.