REVIEW OF FINANCIAL MANAGEMENT IN PRIVATE FIRMS: UNLOCKING THE CASH MANAGEMENT MODEL

Reference: Udoh, S., (2022). Review of Financial Management in Private Firms: Unlocking the Cash Management Model. International Journal of Entrepreneurial Knowledge, 10(2), 95-106. doi: 10.37335/ijek.v10i2.172

Authors

DOI:

https://doi.org/10.37335/ijek.v10i2.172

Keywords:

financial management, private firms, cash management, model

Abstract

Financial management is a complex body of knowledge that is still evolving without any successful template for its practice, especially in private firms. This paper reviews research on actual financial management in private firms to see if cash management models critical to working capital management are incorporated.  The approach is to review all the models in extant literature used for cash management, itself a component of working capital.  However, search results show that only Pugmire (1952) outlines the activities involved in actual financial management practice for local schools in the United States.  He identified the generalizable constituents of the financial management process, including budgeting, accounting, auditing, records and reports, and cost analysis. The choice of cash as the review focus is because it is the essence of financial management in private firms: determining and sourcing capital as cash and utilizing it by allocation process to generate more cash and maximize the firm's value to stakeholders. Therefore, this paper contributes to financial management literature by extending Pugmire's (1952) template for public schools with cash management models in extant literature that can also be adapted for private firms, with potential for further research.

Author Biography

Salem Udoh, Tomas Bata University, Zlin, Czech Republic

Affiliation: Department of Management, Faculty of Management and Economics, Tomas Bata University, T.G.Masaryka Square,5555,760 01, Zlin, Czech Republic.

Email: udoh@utb.cz

He is a doctoral scholar with research activities mainly focusing on cost management, financial management, and auditing. He has over two decades of private and public sector industry experience, including ten years in academia.

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Published

2022-12-22