The Effect of Financial Assistance, Accounts Receivable Management and University Size on Financial Distress

Abstract

This study examines the factors influencing financial distress faced by a university in Malaysia. Specifically, this study examines the effect of financial assistance to students, accounts receivable management and university size on financial distress of a university in Malaysia. This study utilises questionnaire survey distributed to the employees who are responsible in the revenue management and credit control activities in the university. The results of this study shows that financial assistance to students and accounts receivable management significantly and positively influence the financial distress faced by the university. This study however, shows no evidence that university size influences financial distress in the university. The findings in this study indicate that universities can strategize ways to increase opportunities for financial assistance to students in order to reduce chances of the university facing financial distress. In addition, management of the universities also need to improve their accounts receivable management. This study provides new findings on factors influencing financial distress in the context of the education sector.