RRL

According to Tamiru Kumsa Deresa (2016), financial management is generally defined

as the management of capital sources and uses in order to achieve a desired goal. Financial

management is that managerial activity which is considered with the planning and controlling of

the firm’s financial resources. The role of the financial manager is to ensure that there is capital

sufficient enough to finance activities, and this capital is available at the right amount, at the

right time, at the lowest cost. The field of finance is closely related to economics. The financial

manager must understand the economic framework within which his firm is operating, and also

be able to use economic theories as guidelines for efficient business operation. The primary

economic principle used in managerial finance is managerial analysis, the principle that financial

decisions should be made and actions taken only when the added benefits exceed the added

costs. Financial management is, in effect, applied economics because it is concerned with the

allocation of a company’s scarce financial resources among competing choices. Started as a

branch of economics, it draws heavily on economics for its theoretical concepts even today.

According to Moha Asri Abdullah (2015), the term business success is usually used as

the achievement of a small business within a specified period of time. Thus, business success is

the measure that determines how well an organization or business attains its goals. In fact,

business success also refers to encompass an entire venture or even to control unexpected

state of affairs component within a specified parameter, where the financial and non-financial

items can be the parameter. Financial business success refers the success is measured in

terms of financial indicators. More specifically, if a Small and Medium Enterprise (SME)

measures its success or failure with various financial indicators like profit, sales turnover, share

prices, revenue, and so on; this is specified as financial business success (Grant, Jammine and

Thomas., 1988; Garrigos-Simon and Marques, 2004; Marques et al., 2005; Tracey and Tan,

2001). Financial success can usually express with quantitative indicators that can be presented
with a number. This is basically an extent or a degree of numerical values taken from a small

business or an enterprise‟s financial statements. Besides, there are many standard ratios which

also be used to evaluate the overall financial performance that indicates business failure or

success. In small business, the financial measurement can be used by managers where the

financial analysts use financial indicators to evaluate the business success (Groppelli and

Nikbakht, 2000).

According to Khadijah Mohamad Radzi1, Mohammad Nazri Mohd Nor2, and Suhana

Mohezar Ali (2017), business success is about the achievement of goals and objectives of a

company, which is not explicitly defined (Ngwangwama, Ungerer, & Morrison, (2013); Foley &

Green, 1989). It can also be characterized as a firm's ability to create acceptable outcomes and

actions (Van Praag, 2003; Marom & Lussier, 2014). There is no universal acceptable definition

of business success and a majority of management studies measure business success from the

perspective of firms' performance (Van Auken & Werbel, 2006; Reijonen & Komppula, 2007;

Wang & Wang, 2012). In fact, firm performance is also complex and has multidimensional

facets. Additionally, according to Islam, Khan, Obaidullah, and Alam (2011), there are at least

two pertinent dimensions of business success: (1) financial vs. nonfinancial, and (2) short- vs.

long-term success. Based on this contend, there are various ways to measure business

success that includes survival, profits, return on investment, sales growth, number of personnel

employed, happiness, corporate reputation, and others (Schmidpeter & Weidinger, 2014).