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A Comparison of Small Businesses Costs and Returns in Developing Socioeconomic: A Study in Phnom Penh, Cambodia

Received: 1 August 2015     Accepted: 10 August 2015     Published: 19 August 2015
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Abstract

In Cambodia, a large portion of the population is associated with small business instead of paid Employees, which contributes a major share of the country's economy. Recently, small business priority has grown higher than conventional agriculture practice and service sector. This study tries to analyze the investment costs and returns of three small businesses (Recycling shop, Antique shop and Small Restaurant) in Cambodia. Standard financial tools and techniques were used to determine investment costs and returns of specific business over five-year period of time. The sensitivity analysis of investment return was conducted by using internal rate of return and net present value analysis;return of investment was used to determine annual return and payback time, five years benefits and costs ratio were analyzed to evaluate five-year performance of return of each business. The sensitivity analysis shows that, antique shop has a higher internal rate of return 30.784% than recycling shop 25.362% and small restaurant 26.496% and at 20% discount rate the net present value is bigger for antique shop. The annual return of investment shows an increasing trend for selective three businesses and exhibit profit gain after five-year period of time, however the longer payback period (2.6 years) of the antique shop consider comparatively risky business than recycling shop and small restaurant. Five years' net benefits and costs ratio are higher for small restaurant 1.1684, whereas antique shop and recycling shop are 1.1631 and 1.1604. The high increasing discount rate of antique shop is indicating higher benefit and cost ratio in the future. From the result of the financial analysis, it is suggested that, selective three businesses can perform well in terms of gain profit and profitability, so these could be effective business practice for the developing socioeconomic of Cambodia.

Published in International Journal of Economics, Finance and Management Sciences (Volume 3, Issue 4)
DOI 10.11648/j.ijefm.20150304.18
Page(s) 406-410
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2015. Published by Science Publishing Group

Keywords

Small Business, Internal Rate of Return, Return of Investment, Benefits and Costs, Socioeconomic

References
[1] The World Bank, Rebuilding Policy Buffers, Reinvigorating Growth,76-78.
[2] H. Sen, National Population Policy, Harvard School of Public Health. August 2003, (2003).
[3] H. Hill, J. Menon, Cambodia: Rapid Growth with Institutional Constraints, January 2013, ADB Economics Working Paper Series, 331 (2013).
[4] OECD, Economic Outlook for Southeast Asia, China and India 2015, OECD Publishing.
[5] World Bank, GDP Growth (annual %) Data Bank, Cambodia,.
[6] International Monetary Fund, World Economic Outlook, Legacies, Clouds, Uncertainties, October 2014.
[7] World Bank, poverty profile and trend in Cambodia, Cambodia Socio‐Economic Survey (CSES), 2007, 48618-KH (2009).
[8] Trading Economics, Cambodian Unemployment Rate, 1994-2015.
[9] ILO, Global Wage Report 2014 / 15, Wages and income inequality, International Labour Organization 2015.
[10] CIDS, Minimum Wage Compliance Report Cambodia, August 2011, (2011).
[11] S. Kapsos, R. Horne, Working poverty in the world: Introducing new estimates using household survey data, ILO: Key Indicators of the Labour Market, 7th edn (Geneva, ILO), Ch. 1A, (2011).
[12] Ministry of Tourism, Tourism Statistics Report, May 2015, Statistics and Tourism Information Department.
[13] Money Converter, (26 July 2015).
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  • APA Style

    Leaksmy Chhay, Md Manik Mian, Rathny Suy. (2015). A Comparison of Small Businesses Costs and Returns in Developing Socioeconomic: A Study in Phnom Penh, Cambodia. International Journal of Economics, Finance and Management Sciences, 3(4), 406-410. https://doi.org/10.11648/j.ijefm.20150304.18

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    ACS Style

    Leaksmy Chhay; Md Manik Mian; Rathny Suy. A Comparison of Small Businesses Costs and Returns in Developing Socioeconomic: A Study in Phnom Penh, Cambodia. Int. J. Econ. Finance Manag. Sci. 2015, 3(4), 406-410. doi: 10.11648/j.ijefm.20150304.18

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    AMA Style

    Leaksmy Chhay, Md Manik Mian, Rathny Suy. A Comparison of Small Businesses Costs and Returns in Developing Socioeconomic: A Study in Phnom Penh, Cambodia. Int J Econ Finance Manag Sci. 2015;3(4):406-410. doi: 10.11648/j.ijefm.20150304.18

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  • @article{10.11648/j.ijefm.20150304.18,
      author = {Leaksmy Chhay and Md Manik Mian and Rathny Suy},
      title = {A Comparison of Small Businesses Costs and Returns in Developing Socioeconomic: A Study in Phnom Penh, Cambodia},
      journal = {International Journal of Economics, Finance and Management Sciences},
      volume = {3},
      number = {4},
      pages = {406-410},
      doi = {10.11648/j.ijefm.20150304.18},
      url = {https://doi.org/10.11648/j.ijefm.20150304.18},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20150304.18},
      abstract = {In Cambodia, a large portion of the population is associated with small business instead of paid Employees, which contributes a major share of the country's economy. Recently, small business priority has grown higher than conventional agriculture practice and service sector. This study tries to analyze the investment costs and returns of three small businesses (Recycling shop, Antique shop and Small Restaurant) in Cambodia. Standard financial tools and techniques were used to determine investment costs and returns of specific business over five-year period of time. The sensitivity analysis of investment return was conducted by using internal rate of return and net present value analysis;return of investment was used to determine annual return and payback time, five years benefits and costs ratio were analyzed to evaluate five-year performance of return of each business. The sensitivity analysis shows that, antique shop has a higher internal rate of return 30.784% than recycling shop 25.362% and small restaurant 26.496% and at 20% discount rate the net present value is bigger for antique shop. The annual return of investment shows an increasing trend for selective three businesses and exhibit profit gain after five-year period of time, however the longer payback period (2.6 years) of the antique shop consider comparatively risky business than recycling shop and small restaurant. Five years' net benefits and costs ratio are higher for small restaurant 1.1684, whereas antique shop and recycling shop are 1.1631 and 1.1604. The high increasing discount rate of antique shop is indicating higher benefit and cost ratio in the future. From the result of the financial analysis, it is suggested that, selective three businesses can perform well in terms of gain profit and profitability, so these could be effective business practice for the developing socioeconomic of Cambodia.},
     year = {2015}
    }
    

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  • TY  - JOUR
    T1  - A Comparison of Small Businesses Costs and Returns in Developing Socioeconomic: A Study in Phnom Penh, Cambodia
    AU  - Leaksmy Chhay
    AU  - Md Manik Mian
    AU  - Rathny Suy
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    DO  - 10.11648/j.ijefm.20150304.18
    T2  - International Journal of Economics, Finance and Management Sciences
    JF  - International Journal of Economics, Finance and Management Sciences
    JO  - International Journal of Economics, Finance and Management Sciences
    SP  - 406
    EP  - 410
    PB  - Science Publishing Group
    SN  - 2326-9561
    UR  - https://doi.org/10.11648/j.ijefm.20150304.18
    AB  - In Cambodia, a large portion of the population is associated with small business instead of paid Employees, which contributes a major share of the country's economy. Recently, small business priority has grown higher than conventional agriculture practice and service sector. This study tries to analyze the investment costs and returns of three small businesses (Recycling shop, Antique shop and Small Restaurant) in Cambodia. Standard financial tools and techniques were used to determine investment costs and returns of specific business over five-year period of time. The sensitivity analysis of investment return was conducted by using internal rate of return and net present value analysis;return of investment was used to determine annual return and payback time, five years benefits and costs ratio were analyzed to evaluate five-year performance of return of each business. The sensitivity analysis shows that, antique shop has a higher internal rate of return 30.784% than recycling shop 25.362% and small restaurant 26.496% and at 20% discount rate the net present value is bigger for antique shop. The annual return of investment shows an increasing trend for selective three businesses and exhibit profit gain after five-year period of time, however the longer payback period (2.6 years) of the antique shop consider comparatively risky business than recycling shop and small restaurant. Five years' net benefits and costs ratio are higher for small restaurant 1.1684, whereas antique shop and recycling shop are 1.1631 and 1.1604. The high increasing discount rate of antique shop is indicating higher benefit and cost ratio in the future. From the result of the financial analysis, it is suggested that, selective three businesses can perform well in terms of gain profit and profitability, so these could be effective business practice for the developing socioeconomic of Cambodia.
    VL  - 3
    IS  - 4
    ER  - 

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Author Information
  • School of Economics, IIC University of Technology, Phnom Penh, Cambodia

  • School of Urban Construction, and Environmental Engineering, Chongqing University, Chongqing, China

  • School of Public Affairs, University of Science and Technology of China, Anhui, China

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