Managing working capital for profitability; Experience in the Saudi SME sector

This study is an attempt to examine the relationship between Assertive investment, inventory conversion period, cash conversion period, firm performance, and market value. Moreover, this study also examined the mediating role of firm performance. The data for this research was collected from the employees working in the SME sector of KSA. A self-administrative survey was conducted to collect the data. After three reminders, 68.4% of questionnaires were returned, and  66.7% were found to be duly completed and used in this research. The data was gleaned from these questionnaires and was later analyzed using SPSS 25 and Smart PLS 3. The study’s results revealed that except for the inventory conversion period, all other chosen parameters affect the market value of the Saudi SME sector. At the same time, the rest of the direct effects are confirmed. On the other hand, the mediating role of firm performance is confirmed between CCP, ICP, and MV. The findings of this study are helpful for the policymakers of the SME sector in KSA