Hassim, S; Kadir, M R A; Lew, Y L and Sim, Y C (2003) Estimation of minimum working capital for construction projects in Malaysia. Journal of Construction Engineering and Management, 129(4), pp. 369-374. ISSN 0733-9364
Abstract
Forecasting cash requirements is essential for all contractors during the tendering stage since cash flow at the beginning of the project is a major cause of construction companies' failure. Unfortunately, estimating minimum working capital (MWC) is not the mainstream practice of the majority of contractors in Malaysia, who find that the present models for estimating MWC are cumbersome and seldom give an accurate estimate. Therefore estimates of MWC made during the tendering stage need to be simplified so they can be prepared quickly with minimum input. It is important for the developer or owner to select a qualified contractor with competent financial backing. This paper establishes the relationship among the factors that contribute to MWC requirements and presents a simple model that could be used as a guide to estimate MWC for housing construction projects in Malaysia. The estimation is based on percentages of variables of contract value based on the historical data that influence MWC; the MWC obtained is then expressed in terms of percentage of contract value.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | capital; contractors; cost control; financial management; Malaysia |
| Index terms: | estimate, residential construction, estimation, owner, forecasting, Malaysia, financial management, estimating, construction project, cost control, construction company, cash flow |
| Subjects: | financial and cost management, prediction and forecasting, economic analysis, organization, sociology, production management, Geography, construction integration, financial management |
| Topics: | Stakeholder Management, Geographical Context, Project Management, Research Practice, Business Strategy, Cost Management |
| Descriptive scope: | 3 PCA |
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