Impact of Financing on Sales Growth

Abstract

Purpose: The purpose of the study is to examine the impact of credit supply and long term financing on sales growth in manufacturing sector.Design/methodology/approach: It is causal study; in which secondary data from audited annual reports of manufacturing firms are included. Findings: It is proved that long term financing has significant negative effect on sale growth. While, trade credit and lagged sales growth are found to increase sales.Practical implications: It has practical implication from manager’s perspectives. It is beneficial for managers to increase their firm’s growth efficiently by managing the supply of trade credit. It will also enhance their skill to manage long term loans so that firm’s sales can’t effected badly. Originality Value: It is the unique study as it provide evidence that how sales growth of the manufacturing sector can be effected by granting trade credit and taking long term financing followed by trade-off theory.