Financial Literacy of SMEs Managers

In this paper we present a study that we undertook in late 2014, in the Republic of Srpska (one of two entities in Bosnia and Herzegovina). The research starts from the assumption that the owners and / or managers of small and medium-sized enterprises (SMEs) do not have a high level of financial literacy. We started from the following hypothesis and that is not even possess the appropriate level of financial awareness in certain important aspects of financial management. Although one might expect that the owners and managers of small and medium-sized firms have significant expertise in financial management as a condition for an appropriate level of financial literacy and financial awareness as an important element of financial literacy, this research has confirmed the initial hypothesis. Done empirical research based on survey research and interviews with managers and owners of small and medium enterprises ( SMEs) shows that interviewed managers have unexpectedly low level of basic financial knowledge. Financial literacy and awareness of the interviewed managers are disappointingly low. SMEs managers are very few use the proper ratios and ratio analysis. They are not close to the methodology of financial analysis. They are not aware of the intangible values of their companies. They manage liquidity of the firms on '' spontaneous '' way in close relation with the prevalence of '' iliquidity culture ''. Financial knowledge is obviously not a prerequisite for the success of SME-s. It can be concluded that some other skills and abilities have a higher rank of significance in comparison with financial literacy.