IOSR Journal of Economics and Finance (IOSR-JEF) discourages theoretical articles that are limited to axiomatics or that discuss minor variations of familiar models. Similarly, IOSR-JEF has little interest in empirical papers that do not explain the model's theoretical foundations or that exhausts themselves in applying a new or established technique (such as cointegration) to another data set without providing very good reasons why this research is important.
Effect of working capital on profitability in indian markets and concept of z...mvkdel
This document provides an analysis of the relationship between working capital management and profitability for Indian companies from 2005-2010. It discusses key concepts around working capital, including how it refers to current assets and liabilities required for short-term financing. Prior research has shown that both excessive and low levels of working capital can negatively impact profitability. The document reviews literature on working capital management and profitability relationships. It aims to contribute to understanding how working capital management impacts profitability to help managers make decisions that create shareholder value, especially in emerging markets like India.
This document summarizes a research study that examined the relationship between working capital management and profitability for non-listed firms in Ghana from 2004-2009. The study used cash conversion cycles and its components (days of receivables, days of inventory, and days of payables) as measures of working capital management. Gross operating profit to total assets was used as the measure of firm performance. The results showed that profitability was negatively related to the length of the cash conversion cycle. Specifically, performance was positively affected by reducing days of receivables and days of inventory. Additionally, firm size, GDP growth, and sales growth positively impacted performance. The study suggests that managers in emerging markets should focus on effective working capital management to improve
The impact of working capital management on firm profitability in different b...Rifat Humayun
This paper investigates the effect of the business cycle on the link between working capital, the difference between current assets and current liabilities, and corporate performance.
Efficient working capital management is recognized as an important aspect of financial management practices in all organizational forms.
In acknowledgement of this importance, the CFO Magazine publishes an annual study of corporate working capital management performance in many countries.
Impact of working capital on firm profitabilityWaqas Mehmood
This document analyzes the impact of working capital management on the profitability of sugar and leather firms in Pakistan. It examines secondary data from 5 sugar and 5 leather firms over 2008-2012. The key variables studied are cash conversion cycle, interest coverage ratio, debt-equity ratio, age of inventory, age of debtors, age of creditors, and return on assets. The study aims to determine if there is a significant relationship between working capital management and firm profitability. The results could help managers optimize working capital levels to improve financial performance.
Impact of working capital on profitabilityNuzzar Naseem
This document summarizes a research study that examined the impact of working capital management on the profitability of firms in Pakistan under different business cycles. The study found that cash conversion cycle and accounts receivable showed a negative relationship with firm profitability in different cycles. Inventory had a positive impact on profitability in boom periods. Accounts payable positively impacted profitability in recessions. The study concluded that efficient working capital management can increase firm profitability.
This document summarizes a study on the impact of capital structure on stock prices in the cement sector of Pakistan. The study uses debt to equity ratio, debt to asset ratio, and interest coverage ratio as independent variables to examine their relationship with stock prices of cement companies. Eleven publicly traded cement companies from 2005 to 2009 were analyzed. The results found a negative relationship between capital structure and stock prices, indicating that higher debt is associated with lower stock prices. The document provides background on Pakistan's cement industry and the objectives of the study, which are to examine how firms structure capital, the relationship between capital structure and stock prices, and implications for investors.
Understanding the impact of working capital management practices on firm'sshamashah
Working capital management involves managing a firm's short-term assets and liabilities. This study examines the working capital management of two firms, BIL ENERGY LTD and TRANSFORMER LTD, over two years to analyze the relationship between working capital management efficiency and firm profitability. Various working capital ratios were calculated and correlated with return on total assets using Spearman's rank correlation. A strong inverse relationship was found between current ratio and return on total assets, indicating that too much emphasis on liquidity can harm profitability. Therefore, firms must maintain an optimum level of working capital to maximize profits without compromising liquidity.
Working Capital Management and Bank profitability in GhanaSamuel Agyei
This document examines the relationship between working capital management practices and profitability of banks in Ghana. It reviews previous empirical studies that have mostly found efficient working capital management, like reducing cash conversion cycles and accounts receivable periods, improves firm profitability. The study uses panel data and random effects techniques to analyze this relationship for Ghanaian banks. Preliminary findings contradict some prior studies by showing cash operating cycles and debtors collection periods positively relate to bank profitability, while creditors payment periods negatively relate to it. The study aims to inform bank managers and policymakers on effective working capital strategies.
Effect of working capital on profitability in indian markets and concept of z...mvkdel
This document provides an analysis of the relationship between working capital management and profitability for Indian companies from 2005-2010. It discusses key concepts around working capital, including how it refers to current assets and liabilities required for short-term financing. Prior research has shown that both excessive and low levels of working capital can negatively impact profitability. The document reviews literature on working capital management and profitability relationships. It aims to contribute to understanding how working capital management impacts profitability to help managers make decisions that create shareholder value, especially in emerging markets like India.
This document summarizes a research study that examined the relationship between working capital management and profitability for non-listed firms in Ghana from 2004-2009. The study used cash conversion cycles and its components (days of receivables, days of inventory, and days of payables) as measures of working capital management. Gross operating profit to total assets was used as the measure of firm performance. The results showed that profitability was negatively related to the length of the cash conversion cycle. Specifically, performance was positively affected by reducing days of receivables and days of inventory. Additionally, firm size, GDP growth, and sales growth positively impacted performance. The study suggests that managers in emerging markets should focus on effective working capital management to improve
The impact of working capital management on firm profitability in different b...Rifat Humayun
This paper investigates the effect of the business cycle on the link between working capital, the difference between current assets and current liabilities, and corporate performance.
Efficient working capital management is recognized as an important aspect of financial management practices in all organizational forms.
In acknowledgement of this importance, the CFO Magazine publishes an annual study of corporate working capital management performance in many countries.
Impact of working capital on firm profitabilityWaqas Mehmood
This document analyzes the impact of working capital management on the profitability of sugar and leather firms in Pakistan. It examines secondary data from 5 sugar and 5 leather firms over 2008-2012. The key variables studied are cash conversion cycle, interest coverage ratio, debt-equity ratio, age of inventory, age of debtors, age of creditors, and return on assets. The study aims to determine if there is a significant relationship between working capital management and firm profitability. The results could help managers optimize working capital levels to improve financial performance.
Impact of working capital on profitabilityNuzzar Naseem
This document summarizes a research study that examined the impact of working capital management on the profitability of firms in Pakistan under different business cycles. The study found that cash conversion cycle and accounts receivable showed a negative relationship with firm profitability in different cycles. Inventory had a positive impact on profitability in boom periods. Accounts payable positively impacted profitability in recessions. The study concluded that efficient working capital management can increase firm profitability.
This document summarizes a study on the impact of capital structure on stock prices in the cement sector of Pakistan. The study uses debt to equity ratio, debt to asset ratio, and interest coverage ratio as independent variables to examine their relationship with stock prices of cement companies. Eleven publicly traded cement companies from 2005 to 2009 were analyzed. The results found a negative relationship between capital structure and stock prices, indicating that higher debt is associated with lower stock prices. The document provides background on Pakistan's cement industry and the objectives of the study, which are to examine how firms structure capital, the relationship between capital structure and stock prices, and implications for investors.
Understanding the impact of working capital management practices on firm'sshamashah
Working capital management involves managing a firm's short-term assets and liabilities. This study examines the working capital management of two firms, BIL ENERGY LTD and TRANSFORMER LTD, over two years to analyze the relationship between working capital management efficiency and firm profitability. Various working capital ratios were calculated and correlated with return on total assets using Spearman's rank correlation. A strong inverse relationship was found between current ratio and return on total assets, indicating that too much emphasis on liquidity can harm profitability. Therefore, firms must maintain an optimum level of working capital to maximize profits without compromising liquidity.
Working Capital Management and Bank profitability in GhanaSamuel Agyei
This document examines the relationship between working capital management practices and profitability of banks in Ghana. It reviews previous empirical studies that have mostly found efficient working capital management, like reducing cash conversion cycles and accounts receivable periods, improves firm profitability. The study uses panel data and random effects techniques to analyze this relationship for Ghanaian banks. Preliminary findings contradict some prior studies by showing cash operating cycles and debtors collection periods positively relate to bank profitability, while creditors payment periods negatively relate to it. The study aims to inform bank managers and policymakers on effective working capital strategies.
Relationship between working capital management nd profitabilitySoumitra Kansabanik
A statistical study has been conducted on few companies in FMCG sector to understand the relationship between working capital management and profitability
This research proposal examines the impact of working capital management on the profitability of sugar and leather companies in Pakistan from 2008-2012. The objectives are to evaluate variables that impact profitability, verify the relationship between working capital management and profitability, examine the relationship between profitability and leverage, and analyze how asset management impacts financial performance. The methodology will use secondary data from 5 companies in each sector collected annually from 2008-2012. The sources will be evaluated for suitability, reliability, adequacy and accuracy. The research structure will include an introduction, objectives, problem statement, research questions, significance, literature review, methodology and bibliography.
The Effect of Capital Structure on Profitability of Energy American Firms:inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The document summarizes a study on working capital management of OPTCL, a power transmission company in Orissa, India. Key findings include that OPTCL had negative working capital over 2008-2011 due to current liabilities exceeding current assets. Current ratios were also unsatisfactory. Debtors were high and increasing, blocking more funds. OPTCL needs to improve working capital management by decreasing current liabilities, increasing revenue collection, and shortening average collection periods. Effective working capital management is important for organizational profitability and growth.
“Working Capital Management and Firms Financial Performance of Oil Companies ...IOSRJBM
The research examined the connection amid Working Capital Management (WCM) in addition to Financial Performance of Oil companies in Nigeria. The Quasi-Experimental design was employed. The hypotheses were tested by using the Pearson Product Moment Correlation (PPMC). Data analysis results point to that of a progressive and perfectly substantial relationship amongst investing and financing rules and Return on Assets (ROA) exists; a neutral and minor relationship amid both financing and investing policies and earnings per share (EPS) exists. Furthermore, there is an insignificant but undesirable relationship amongst investing and financing rules and return on equity (ROE). Conclusively, WCM impacts performance of Nigerian firms primarily from the domain of ROA. It is recommended amongst others that the comprehensive appraisal of fiscal performance trends and WCM framework; Firms in the sector should establish adequate benchmarks of working assets components in order for emerging obligations to be met adequately.
This document summarizes a study that investigates the influence of working capital management on the performance of small and medium enterprises (SMEs) in Pakistan from 2006 to 2012. The study uses data from various sources on SMEs to examine the relationship between return on assets (used as a proxy for profitability) and variables like accounts receivable, inventory, cash conversion cycle, and accounts payable. The results suggest that days of accounts payable has a positive association with profitability, while average collection period, inventory turnover, and cash conversion cycle have an inverse relationship with performance. Firm size and sales growth also positively influence profitability, while debt ratio negatively impacts profitability.
Working capital management at kirloskar pneumatics co. ltd. by rajesh menon randyshiva
The document is a project report on working capital management at Kirloskar Pneumatic Co. Ltd. It includes an acknowledgements section, index, executive summary, objectives, company profile, theoretical background, research methodology, data analysis, findings, and recommendations. The executive summary provides key details about the company, including that it was established in 1958 and manufactures air compressors, pneumatic tools, air conditioning equipment, and hydraulic transmission equipment. It also summarizes that the project studied the company's working capital management over 2 months using interviews, company records, and annual reports.
Financial ratio annalysis dharwad milk project report mbaBabasab Patil
This document provides an index and chapter outline for a study on the financial ratio analysis of Dharwad Milk Producers Union Limited (DMUL). The index lists 6 chapters that will analyze DMUL's industry profile, organization profile, research methodology, data analysis, findings, and conclusions. Chapter 1 provides an executive summary and outlines the objectives to study DMUL's financial performance over 5 years using ratio analysis and determine how it can improve profits by utilizing financial resources.
Working capital management of automobiles industry in haryana [www.writekraft...WriteKraft Dissertations
Writekraft Research and Publications LLP was initially formed, informally, in 2006 by a group of scholars to help fellow students. Gradually, with several dissertations, thesis and assignments receiving acclaim and a good grade, Writekraft was officially founded in 2011 Since its establishment, Writekraft Research & Publications LLP is Guiding and Mentoring PhD Scholars.
Our Mission:
To provide breakthrough research works to our clients through Perseverant efforts towards creativity and innovation”.
Vision:
Writekraft endeavours to be the leading global research and publications company that will fulfil all research needs of our clients. We will achieve this vision through:
Analyzing every customer's aims, objectives and purpose of research
Using advanced and latest tools and technique of research and analysis
Coordinating and including their own ideas and knowledge
Providing the desired inferences and results of the research
In the past decade, we have successfully assisted students from various universities in India and globally. We at Writekraft Research & Publications LLP head office in Kanpur, India are most trusted and professional Research, Writing, Guidance and Publication Service Provider for PhD. Our services meet all your PhD Admissions, Thesis Preparation and Research Paper Publication needs with highest regards for the quality you prefer.
Our Achievements:
NATIONAL AWARD FOR BEST RESEARCH PROJECT (By Hon. President APJ Abdul Kalam)
GOLD MEDAL FOR RESEARCH ON DISABILITY (By Disabled’s Club of India)
NOMINATED FOR BEST MSME AWARDS 2017
5 STAR RATING ON GOOGLE
We have PhD experts from reputed institutions/ organizations like Indian Institute of Technology (IIT), Indian Institute of Management (IIM) and many more apex education institutions in India. Our works are tailored and drafted as per your requirements and are totally unique.
From past years our core advisory members, research team assisted research scholars from various universities from all corners of world.
Subjects/Areas We Cover:
Management, Commerce, Finance, Marketing, Psychology, Education, Sociology, Mass communications, English Literature, English Language, Law, History, Computer Science & Engineering, Electronics & Communication Engineering, Mechanical Engineering, Civil Engineering, Electrical Engineering, Pharmacy & Healthcare.
The main objective of this paper such as the Karachi Stock Exchange market development working capital management (WCM) on firm performance is to determine the impact. In this paper the chemical industry for the period 2009-2014 to 6 years for a sample of 22 firms Karachi Stock Exchange (KSE) working capital management and firm performance of different variables used for analysis . Working Capital Management to measure the variables that were used in this study are the number of recovery days , days in inventory and size , leverage , inventory , equity , sales and gross domestic product (GDP) numbers are control variables. Firm performance measure used in this study for the dependent variable is the return on assets. Firm size is positively affected by the firm’s profits. Firms whose profits are high, their working capital firms are not interested in management and firm performance. The result of the study and working capital is negative relationship between firm performance shows. Is a positive relationship between size and profitability? Firm size is increased or decreased profit increased or decreased respectively. Moreover, profits and principles that support the pecking order used by firms are negative relationship between debts.
The construction industry in India has grown significantly due to infrastructure development needs, growing between 10-15% annually which is faster than GDP growth. It is a major employment sector but remains unorganized and competitive with small and medium businesses dominating. Working capital management is important for construction firms to ensure sufficient cash flow for operations and debt obligations. Inventory, receivables, and payables are key aspects of working capital management that construction firms like JMC Projects focus on through centralized purchasing and receivables collection efforts. The union budget prioritizes infrastructure which provides opportunities for growth.
This document provides an overview of a project report on working capital management at Odisha Power Transmission Corporation Limited (OPTCL). It includes an acknowledgement section thanking those who assisted and guided the project. It also includes declarations certifying that the project was completed and meets requirements for a PGDM program. The project report contains 6 chapters which will analyze OPTCL's working capital ratios from 2009-2013, components of working capital, and make recommendations. Efficient working capital management is important for OPTCL to reduce costs and increase profits while maintaining operations and meeting obligations.
The document analyzes the working capital management and ratio analysis of Tinplate Company of India Limited over several years. It finds that the company had negative working capital in 2008 and 2012 due to its parent company's policies, though negative working capital does not necessarily indicate a poor market position. Various ratios like current ratio, quick ratio, and debtors turnover ratio are calculated from the company's financial statements. Recommendations include growing gross working capital in line with production, paying sufficient dividends, and enhancing marketing strategy. In conclusion, the company has maintained good liquidity and paid liabilities and dividends on time.
This paper investigates the relationship between working capital management and financial performance of Pharmaceuticals and Textile firms listed at the Dhaka Securities Exchange in Bangladesh. The data analysis was carried on ten Pharmaceuticals and Textile firms for a period of 2013 to 2017. Secondary Data was analyzed by applying Descriptive Statistics, Regression and Correlation analysis to findthe relationship of current ratio, inventory conversion period and average payment period with Return on Asset. The findings indicate that the Pharmaceuticals and Textile firms’ performance is influenced by the variables relating to working capital. There is a positive relationship between profitability and current ratioand Inventory Turnover period shows a negative relationship with profitability but Average payment period shows insignificant impact on profitability. The study concludes that there exists a relationship between working capital managementand financial performance of Pharmaceuticals and Textile firms in Bangladesh. The study recommends that for the Pharmaceuticals and Textile firms to remain profitable, they should employ working capital management practice that will help in making decisions about investment mix and policy, matching investment to objective, asset allocation for institution and balancing risk against profitability.
Determinants of working capital management efficiencyAlexander Decker
This document summarizes a research study that examines the determinants of working capital management efficiency for automotive and engineering firms listed on the Karachi Stock Exchange in Pakistan. The study uses cash conversion cycle, days sales inventory, days payable outstanding, and days sales outstanding as explanatory variables to analyze quarterly panel data from 9 firms over 5 years. It also administers a questionnaire on Enterprise Resource Planning (ERP) systems. The study aims to determine the efficient factors of working capital management for these firms and investigate the relationships between working capital components and independent variables. It concludes that keeping the cash conversion cycle shortest through tight collection policies and liberal payment terms, along with efficient inventory management, can help firms keep working capital efficient.
This document analyzes various financial ratios of Shree Halasidhanath Sahakari Sakhar Karkhana Ltd over a 5 year period from 2004-2009. The analysis finds that the company's gross and net profit margins declined over this period, indicating inefficient operations. Liquidity ratios showed the company generally lacked sufficient liquid assets. Current assets turnover was mixed, increasing from 2004-06 but decreasing later. Expenses like direct materials, labor and overhead costs increased as percentages of sales in most years, negatively impacting profitability.
STUDY ON WORKING CAPITAL MANAGEMENT AND RATIO ANALYSIS DONE AT BIOLOGICAL EV...Hanumanth Pearl
This document provides an analysis of working capital management and ratio analysis for Biological (E) Ltd. in Hyderabad, India. It includes definitions of working capital, the company profile, objectives of the study, methodology, data collection sources, data analysis including various ratio calculations like current ratio, quick ratio, turnover ratios, and profit ratios. The findings suggest the company's working capital has generally increased over the years except in 2006-07 and 2012-13. The current ratio is above the satisfactory level of 2:1, indicating it can meet short term obligations. Suggestions are made but not detailed in the summary.
This document discusses a case study on the impact of working capital on the profitability of real estate companies over 10 years from 2004-2014. It defines working capital and working capital management, and explains their importance. It discusses the components of working capital including cash, accounts payable, inventory, and accounts receivable. It also covers ratio analysis, fund flow analysis, and working capital budgets as tools to analyze working capital and ensure adequate funding is available to meet needs. The objective is to investigate the relationship between working capital and organizational profitability.
Comparative study on working capital managementSupa Buoy
This document provides an overview of a project report comparing the working capital management of Bhilai Steel Plant and Tata Iron and Steel Company (TISCO). It includes an acknowledgements section thanking various managers and directors at Bhilai Steel Plant for their guidance and support. It also includes declarations signed by the project guide and student. The document then provides background information on Bhilai Steel Plant, which is one of the first integrated steel plants established in India. It discusses the organizational structure and operations of Bhilai Steel Plant and Steel Authority of India Limited (SAIL), the public sector undertaking that manages Bhilai Steel Plant and several other steel plants. The case study then focuses on providing details about Bhilai
This document provides an introduction and overview of working capital. It defines working capital as the difference between current assets and current liabilities, and represents the funds available for day-to-day operations. The document discusses the need for working capital, components of working capital like cash, receivables and inventory, and factors that influence working capital requirements like the nature of the business, credit terms, seasonality and growth. It also outlines sources of working capital including equity, debt, bank loans and trade credit, and emphasizes the importance of effective working capital management.
Working capital management is very fundamental to
the liquidity and profitability of any organization and
the two variables are vital in evaluating the
performance and ultimately deciding the survival of any
organisation. This study presents an empirical investigation of
the relationship between working capital management and
profitability using Nestle Nigeria Plc and Cadbury Nigeria Plc as case studies. The study used correlation and regression analysis to analyze data. Quick ratio was used to measure liquidity, current ratio, trade receivable collection and trade payables payment periods were used as efficiency variables to capture the working capital management policy adopted by these companies
while return on equity was used as the profitability variable.
Liquidity and efficiency variables were correlated against return on equity. The study found a negative relationship between the liquidity, two of the efficiency ratios and return on equity for Nestle Nigeria Plc while it found a positive relationship between the liquidity, efficiency ratios and return on equity of Cadbury Nigeria Plc. To enhance profitable short-term investments, the study recommends that companies should manage their working capital efficiently by upgrading the quality of their assets while
obsolete inventories should be written off.
Relationship between working capital management nd profitabilitySoumitra Kansabanik
A statistical study has been conducted on few companies in FMCG sector to understand the relationship between working capital management and profitability
This research proposal examines the impact of working capital management on the profitability of sugar and leather companies in Pakistan from 2008-2012. The objectives are to evaluate variables that impact profitability, verify the relationship between working capital management and profitability, examine the relationship between profitability and leverage, and analyze how asset management impacts financial performance. The methodology will use secondary data from 5 companies in each sector collected annually from 2008-2012. The sources will be evaluated for suitability, reliability, adequacy and accuracy. The research structure will include an introduction, objectives, problem statement, research questions, significance, literature review, methodology and bibliography.
The Effect of Capital Structure on Profitability of Energy American Firms:inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The document summarizes a study on working capital management of OPTCL, a power transmission company in Orissa, India. Key findings include that OPTCL had negative working capital over 2008-2011 due to current liabilities exceeding current assets. Current ratios were also unsatisfactory. Debtors were high and increasing, blocking more funds. OPTCL needs to improve working capital management by decreasing current liabilities, increasing revenue collection, and shortening average collection periods. Effective working capital management is important for organizational profitability and growth.
“Working Capital Management and Firms Financial Performance of Oil Companies ...IOSRJBM
The research examined the connection amid Working Capital Management (WCM) in addition to Financial Performance of Oil companies in Nigeria. The Quasi-Experimental design was employed. The hypotheses were tested by using the Pearson Product Moment Correlation (PPMC). Data analysis results point to that of a progressive and perfectly substantial relationship amongst investing and financing rules and Return on Assets (ROA) exists; a neutral and minor relationship amid both financing and investing policies and earnings per share (EPS) exists. Furthermore, there is an insignificant but undesirable relationship amongst investing and financing rules and return on equity (ROE). Conclusively, WCM impacts performance of Nigerian firms primarily from the domain of ROA. It is recommended amongst others that the comprehensive appraisal of fiscal performance trends and WCM framework; Firms in the sector should establish adequate benchmarks of working assets components in order for emerging obligations to be met adequately.
This document summarizes a study that investigates the influence of working capital management on the performance of small and medium enterprises (SMEs) in Pakistan from 2006 to 2012. The study uses data from various sources on SMEs to examine the relationship between return on assets (used as a proxy for profitability) and variables like accounts receivable, inventory, cash conversion cycle, and accounts payable. The results suggest that days of accounts payable has a positive association with profitability, while average collection period, inventory turnover, and cash conversion cycle have an inverse relationship with performance. Firm size and sales growth also positively influence profitability, while debt ratio negatively impacts profitability.
Working capital management at kirloskar pneumatics co. ltd. by rajesh menon randyshiva
The document is a project report on working capital management at Kirloskar Pneumatic Co. Ltd. It includes an acknowledgements section, index, executive summary, objectives, company profile, theoretical background, research methodology, data analysis, findings, and recommendations. The executive summary provides key details about the company, including that it was established in 1958 and manufactures air compressors, pneumatic tools, air conditioning equipment, and hydraulic transmission equipment. It also summarizes that the project studied the company's working capital management over 2 months using interviews, company records, and annual reports.
Financial ratio annalysis dharwad milk project report mbaBabasab Patil
This document provides an index and chapter outline for a study on the financial ratio analysis of Dharwad Milk Producers Union Limited (DMUL). The index lists 6 chapters that will analyze DMUL's industry profile, organization profile, research methodology, data analysis, findings, and conclusions. Chapter 1 provides an executive summary and outlines the objectives to study DMUL's financial performance over 5 years using ratio analysis and determine how it can improve profits by utilizing financial resources.
Working capital management of automobiles industry in haryana [www.writekraft...WriteKraft Dissertations
Writekraft Research and Publications LLP was initially formed, informally, in 2006 by a group of scholars to help fellow students. Gradually, with several dissertations, thesis and assignments receiving acclaim and a good grade, Writekraft was officially founded in 2011 Since its establishment, Writekraft Research & Publications LLP is Guiding and Mentoring PhD Scholars.
Our Mission:
To provide breakthrough research works to our clients through Perseverant efforts towards creativity and innovation”.
Vision:
Writekraft endeavours to be the leading global research and publications company that will fulfil all research needs of our clients. We will achieve this vision through:
Analyzing every customer's aims, objectives and purpose of research
Using advanced and latest tools and technique of research and analysis
Coordinating and including their own ideas and knowledge
Providing the desired inferences and results of the research
In the past decade, we have successfully assisted students from various universities in India and globally. We at Writekraft Research & Publications LLP head office in Kanpur, India are most trusted and professional Research, Writing, Guidance and Publication Service Provider for PhD. Our services meet all your PhD Admissions, Thesis Preparation and Research Paper Publication needs with highest regards for the quality you prefer.
Our Achievements:
NATIONAL AWARD FOR BEST RESEARCH PROJECT (By Hon. President APJ Abdul Kalam)
GOLD MEDAL FOR RESEARCH ON DISABILITY (By Disabled’s Club of India)
NOMINATED FOR BEST MSME AWARDS 2017
5 STAR RATING ON GOOGLE
We have PhD experts from reputed institutions/ organizations like Indian Institute of Technology (IIT), Indian Institute of Management (IIM) and many more apex education institutions in India. Our works are tailored and drafted as per your requirements and are totally unique.
From past years our core advisory members, research team assisted research scholars from various universities from all corners of world.
Subjects/Areas We Cover:
Management, Commerce, Finance, Marketing, Psychology, Education, Sociology, Mass communications, English Literature, English Language, Law, History, Computer Science & Engineering, Electronics & Communication Engineering, Mechanical Engineering, Civil Engineering, Electrical Engineering, Pharmacy & Healthcare.
The main objective of this paper such as the Karachi Stock Exchange market development working capital management (WCM) on firm performance is to determine the impact. In this paper the chemical industry for the period 2009-2014 to 6 years for a sample of 22 firms Karachi Stock Exchange (KSE) working capital management and firm performance of different variables used for analysis . Working Capital Management to measure the variables that were used in this study are the number of recovery days , days in inventory and size , leverage , inventory , equity , sales and gross domestic product (GDP) numbers are control variables. Firm performance measure used in this study for the dependent variable is the return on assets. Firm size is positively affected by the firm’s profits. Firms whose profits are high, their working capital firms are not interested in management and firm performance. The result of the study and working capital is negative relationship between firm performance shows. Is a positive relationship between size and profitability? Firm size is increased or decreased profit increased or decreased respectively. Moreover, profits and principles that support the pecking order used by firms are negative relationship between debts.
The construction industry in India has grown significantly due to infrastructure development needs, growing between 10-15% annually which is faster than GDP growth. It is a major employment sector but remains unorganized and competitive with small and medium businesses dominating. Working capital management is important for construction firms to ensure sufficient cash flow for operations and debt obligations. Inventory, receivables, and payables are key aspects of working capital management that construction firms like JMC Projects focus on through centralized purchasing and receivables collection efforts. The union budget prioritizes infrastructure which provides opportunities for growth.
This document provides an overview of a project report on working capital management at Odisha Power Transmission Corporation Limited (OPTCL). It includes an acknowledgement section thanking those who assisted and guided the project. It also includes declarations certifying that the project was completed and meets requirements for a PGDM program. The project report contains 6 chapters which will analyze OPTCL's working capital ratios from 2009-2013, components of working capital, and make recommendations. Efficient working capital management is important for OPTCL to reduce costs and increase profits while maintaining operations and meeting obligations.
The document analyzes the working capital management and ratio analysis of Tinplate Company of India Limited over several years. It finds that the company had negative working capital in 2008 and 2012 due to its parent company's policies, though negative working capital does not necessarily indicate a poor market position. Various ratios like current ratio, quick ratio, and debtors turnover ratio are calculated from the company's financial statements. Recommendations include growing gross working capital in line with production, paying sufficient dividends, and enhancing marketing strategy. In conclusion, the company has maintained good liquidity and paid liabilities and dividends on time.
This paper investigates the relationship between working capital management and financial performance of Pharmaceuticals and Textile firms listed at the Dhaka Securities Exchange in Bangladesh. The data analysis was carried on ten Pharmaceuticals and Textile firms for a period of 2013 to 2017. Secondary Data was analyzed by applying Descriptive Statistics, Regression and Correlation analysis to findthe relationship of current ratio, inventory conversion period and average payment period with Return on Asset. The findings indicate that the Pharmaceuticals and Textile firms’ performance is influenced by the variables relating to working capital. There is a positive relationship between profitability and current ratioand Inventory Turnover period shows a negative relationship with profitability but Average payment period shows insignificant impact on profitability. The study concludes that there exists a relationship between working capital managementand financial performance of Pharmaceuticals and Textile firms in Bangladesh. The study recommends that for the Pharmaceuticals and Textile firms to remain profitable, they should employ working capital management practice that will help in making decisions about investment mix and policy, matching investment to objective, asset allocation for institution and balancing risk against profitability.
Determinants of working capital management efficiencyAlexander Decker
This document summarizes a research study that examines the determinants of working capital management efficiency for automotive and engineering firms listed on the Karachi Stock Exchange in Pakistan. The study uses cash conversion cycle, days sales inventory, days payable outstanding, and days sales outstanding as explanatory variables to analyze quarterly panel data from 9 firms over 5 years. It also administers a questionnaire on Enterprise Resource Planning (ERP) systems. The study aims to determine the efficient factors of working capital management for these firms and investigate the relationships between working capital components and independent variables. It concludes that keeping the cash conversion cycle shortest through tight collection policies and liberal payment terms, along with efficient inventory management, can help firms keep working capital efficient.
This document analyzes various financial ratios of Shree Halasidhanath Sahakari Sakhar Karkhana Ltd over a 5 year period from 2004-2009. The analysis finds that the company's gross and net profit margins declined over this period, indicating inefficient operations. Liquidity ratios showed the company generally lacked sufficient liquid assets. Current assets turnover was mixed, increasing from 2004-06 but decreasing later. Expenses like direct materials, labor and overhead costs increased as percentages of sales in most years, negatively impacting profitability.
STUDY ON WORKING CAPITAL MANAGEMENT AND RATIO ANALYSIS DONE AT BIOLOGICAL EV...Hanumanth Pearl
This document provides an analysis of working capital management and ratio analysis for Biological (E) Ltd. in Hyderabad, India. It includes definitions of working capital, the company profile, objectives of the study, methodology, data collection sources, data analysis including various ratio calculations like current ratio, quick ratio, turnover ratios, and profit ratios. The findings suggest the company's working capital has generally increased over the years except in 2006-07 and 2012-13. The current ratio is above the satisfactory level of 2:1, indicating it can meet short term obligations. Suggestions are made but not detailed in the summary.
This document discusses a case study on the impact of working capital on the profitability of real estate companies over 10 years from 2004-2014. It defines working capital and working capital management, and explains their importance. It discusses the components of working capital including cash, accounts payable, inventory, and accounts receivable. It also covers ratio analysis, fund flow analysis, and working capital budgets as tools to analyze working capital and ensure adequate funding is available to meet needs. The objective is to investigate the relationship between working capital and organizational profitability.
Comparative study on working capital managementSupa Buoy
This document provides an overview of a project report comparing the working capital management of Bhilai Steel Plant and Tata Iron and Steel Company (TISCO). It includes an acknowledgements section thanking various managers and directors at Bhilai Steel Plant for their guidance and support. It also includes declarations signed by the project guide and student. The document then provides background information on Bhilai Steel Plant, which is one of the first integrated steel plants established in India. It discusses the organizational structure and operations of Bhilai Steel Plant and Steel Authority of India Limited (SAIL), the public sector undertaking that manages Bhilai Steel Plant and several other steel plants. The case study then focuses on providing details about Bhilai
This document provides an introduction and overview of working capital. It defines working capital as the difference between current assets and current liabilities, and represents the funds available for day-to-day operations. The document discusses the need for working capital, components of working capital like cash, receivables and inventory, and factors that influence working capital requirements like the nature of the business, credit terms, seasonality and growth. It also outlines sources of working capital including equity, debt, bank loans and trade credit, and emphasizes the importance of effective working capital management.
Working capital management is very fundamental to
the liquidity and profitability of any organization and
the two variables are vital in evaluating the
performance and ultimately deciding the survival of any
organisation. This study presents an empirical investigation of
the relationship between working capital management and
profitability using Nestle Nigeria Plc and Cadbury Nigeria Plc as case studies. The study used correlation and regression analysis to analyze data. Quick ratio was used to measure liquidity, current ratio, trade receivable collection and trade payables payment periods were used as efficiency variables to capture the working capital management policy adopted by these companies
while return on equity was used as the profitability variable.
Liquidity and efficiency variables were correlated against return on equity. The study found a negative relationship between the liquidity, two of the efficiency ratios and return on equity for Nestle Nigeria Plc while it found a positive relationship between the liquidity, efficiency ratios and return on equity of Cadbury Nigeria Plc. To enhance profitable short-term investments, the study recommends that companies should manage their working capital efficiently by upgrading the quality of their assets while
obsolete inventories should be written off.
This document contains a list of 40 projects and working papers completed at the Indian Institute of Finance (IIF). The projects cover a wide range of topics related to finance, banking, financial management, mutual funds, stock market analysis, and company/industry analysis. Some of the projects analyze specific companies, while others take a more general look at sectors like banking, insurance, steel, etc. The list provides the titles of the projects but no further details about their scope or findings.
This document is a project report submitted for a Bachelor's degree in Business Administration. It discusses a study of working capital management at Gaurav Exports, a textile company located in Panipat, Haryana, India. The report includes an introduction to the textile industry and company profile of Gaurav Exports. It describes the company's vision, mission, values, organizational structure, products, quality policy, testing facilities, training programs, sourcing, dyeing, weaving, finishing, machinery, sampling, and achievements. It also provides a SWOT analysis of the company. The objective of the report is to analyze the working capital management practices at Gaurav Exports.
A study on working capital management at tataPINKEY GUPTA
This document summarizes a study on working capital management at Tata Steel Limited from 2011-2015. It provides background on Tata Steel and states the objectives of the study which are to understand the significance of working capital, analyze components and efficiency, and compare financial ratios to competitors. The study found that Tata Steel's net working capital fluctuated over the period but generally improved. It provides analysis of key financial ratios for Tata Steel and competitors. The study concludes that Tata Steel faced challenges from regulatory issues but remained committed to investments. Suggestions are made to improve working capital management practices.
Ultratech Cement is India's largest cement company. It has a capacity of 64 million tonnes and is the number 1 cement brand. The company has various plants and grinding units across India as well as in other countries. It started in 1983 and grew over the years through mergers and acquisitions. Ultratech Cement provides a wide range of cement products and has a large market share. It is a profitable company with strong financials and aims to further grow in the cement sector.
A dissertation report on working capital management of arss infrastructure ltdProjects Kart
This document is a project report on working capital management of ARSS Infrastructure Ltd submitted in partial fulfillment of a post-graduate diploma program. It includes an introduction to working capital management, a need for efficient working capital management, and covers topics like gross working capital, net working capital, types of working capital, and determinants of working capital. The report contains chapters on research methodology, analysis of working capital size and components, working capital financing and ratios. It concludes with recommendations to improve working capital management.
A project report on working capital management nirani sugars ltdBabasab Patil
The document discusses working capital management at Nirani Sugars Ltd. It includes an executive summary that outlines the objectives, methodology, and scope of the study which examines the company's working capital needs, components, financing sources, and management efficiency over 5 years. Ratio analysis is used to evaluate the working capital position and overall financial performance of the company. The document also provides background information on India's sugar industry.
This document is a summer training report submitted by Aman Keshawani towards his post graduate degree in management. The report details his internship experience at Ambuja Cement Ltd, where he studied the company's financial tools and marketing strategies. The report includes an introduction to the cement industry and Ambuja Cement, objectives of the study, history and development of ACL, company profile, SWOT analysis, learning about financial planning and analysis, capital structure, leverage analysis, and ACL's marketing segmentation, pricing, distribution channels, and sales promotion strategies.
The document discusses various methods for assessing working capital requirements, including the operating cycle method, drawing power method, turnover method, and cash budget method. It also outlines the types of current assets, factors that influence working capital needs, and different forms of working capital financing such as cash credit, bill financing, and non-fund based limits like letters of credit.
Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company. The document provides a detailed history of HUL from its inception in 1933 to 2010, including mergers, acquisitions, and expansion of its product portfolio and distribution network. It discusses HUL's presence across 20 categories, 700 million consumers in India, 39 factories, and distribution reaching over 1 million retail outlets and 6.3 million outlets. The document also notes HUL's recognition as the most respected company in India for 25 years and as one of the world's most reputed companies.
This document analyzes the relationship between working capital management and firm performance of 30 manufacturing companies in Sri Lanka over the period of 2006-2010. Regression analyses found that cash conversion cycle had a negative relationship with return on total assets, while current ratio and quick ratio were positively related. The study indicates that effective working capital management through reducing cash conversion cycle can increase profitability for manufacturing companies.
This document summarizes a research report on the relationship between working capital management and profitability. The report analyzes data from 60 Pakistani textile companies over 2001-2006. The results show a statistically significant negative relationship between profitability (measured by return on assets) and the number of days accounts receivable, inventory, and accounts payable are outstanding. Proper management of working capital through optimizing current assets and liabilities can thus improve company profits. The report also acknowledges the importance of balancing liquidity and profitability in working capital management.
Working Capital Management in Bajaj Allianz Life InsuranceSuresh kumar
This document appears to be a project report submitted by Suresh Kumar to the University of Pune to fulfill requirements for an MBA degree. The report evaluates working capital management at Bajaj Allianz Life Insurance. It includes an acknowledgment, declaration, index, and executive summary. The report will study concepts of working capital, analyze Bajaj Allianz's profitability, liquidity, and working capital position over five years. Secondary data sources like annual reports and interviews will be used.
Working capital management project report mbaBabasab Patil
This document provides an index and executive summary of a study on the working capital management of Bahety Chemicals & Minerals Pvt Ltd, located in Dandeli, India. The study examines the company's working capital over a five year period from 2006-2010. Key findings include that the company's working capital and profits have increased each year, and it maintains current and quick ratios above standard requirements, indicating a satisfactory level of working capital management and liquidity. The document outlines the objectives, scope, limitations and methodology of the study.
The study analyzed the impact of working capital management on the profitability of 58 small manufacturing firms in Mauritius over the period of 1998-2003. The results showed that return on total assets, a measure of profitability, was positively correlated with measures of working capital management efficiency like accounts receivable days and cash conversion cycle. However, it was negatively correlated with accounts payable days. The paper concluded that synchronizing current assets and liabilities is important for small firm profitability and the paper industry showed best practices in working capital management.
Impact of working capital on profitability of telecom sector in pakistan fina...usman nazir
This document is a thesis submitted by Usman Nazir to the National College of Business
Administration and Economics in Lahore, Pakistan in partial fulfillment of the requirements for a
Masters degree in Commerce. The thesis examines the impact of working capital management on
the profitability of the telecom sector in Pakistan using data from 2011-2015. It defines key terms
like working capital management and provides background on the telecom sector in Pakistan. The
objective is to analyze the relationship between working capital management practices and
profitability in the telecom sector.
This is a useful template depicting the analytical method used by Banks & Financial Institution to assesse the working capital requirement of Customer.
This document discusses a study on working capital management at Sudha Agro Oil and Chemical Industries Limited in Samalkota, India. It provides background on the oil and chemical industry in India and the company. The methodology, objectives, and limitations of the study are described. The document outlines the various chapters that will analyze the company's working capital management based on its financial statements over the last 5 years. It aims to assess the company's financial position, profitability, and viability through financial ratio analysis and interpretation.
This document summarizes a study on the impact of capital structure on the business performance of cement companies listed on Vietnam's stock market. The study analyzed data from 17 cement companies over 9 years from 2010 to 2018. Using a quantitative regression model, the study found that capital structure has an impact on the business performance of cement companies. Specifically, factors like debt ratio, short-term debt ratio, and long-term debt ratio influence returns on equity and assets as well as Tobin's Q ratio. The document reviews several other studies that have examined the relationship between capital structure and performance in other countries and industries, with mixed results reported.
Assessing the effect of liquidity on profitability of commercial banks in kenyaAlexander Decker
This document discusses factors that affect the profitability of commercial banks in Kenya. It provides background on the banking sector in Kenya and reviews various theories on factors that influence bank profitability, including market power theory, efficiency structure theory, and the Modigliani-Miller theorem. The study aimed to determine the effect of internal factors like liquidity on the profitability of commercial banks in Kenya. It found that liquidity has a statistically significant and positive relationship with bank profitability.
Assessing the effect of liquidity on profitability of commercial banks in kenyaAlexander Decker
This document discusses factors that affect the profitability of commercial banks in Kenya. It provides background on the banking sector in Kenya and reviews various theories on factors that influence bank profitability. The study aimed to determine the effect of internal factors like liquidity on the profitability of commercial banks in Kenya. It employed a descriptive research design using secondary data from the annual reports of 43 commercial banks over a 5-year period from 2009 to 2013. The findings showed that liquidity had a statistically significant positive relationship with bank profitability. The document provides context on theories of bank profitability and the motivation and methodology of the study.
Capital structure efficiency of cement industry in tamil naduIAEME Publication
The document summarizes a study on the capital structure efficiency of cement companies in Tamil Nadu over 10 years from 1996-1997 to 2005-2006. The study used Data Envelopment Analysis to evaluate the efficiency of 4 major cement companies - India Cements Limited, Dalmia Cement, Madras Cements Limited, and Chettinadu Cement Corporation Limited. The results showed that the capital structure efficiency scores varied over the years for each company, with most companies having some inefficient years. Cost of funds was found to influence capital structure management efficiency.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
Intellectual capital: A modern model to measure the value creation in a businessAI Publications
Using a sample of 92 patients, this study looked into the impact of intellectual capital on the efficiency of private hospitals. The researchers used a quantitative approach to assess the effect of Intellectual capital (Human capital, Structural capital, and Relational capital) on long-term competitive advantage in private hospitals in Iraq's Kurdistan region. The research sample was selected using a random sampling method and conducted in various locations across Iraq's Kurdistan province. A total of 110 questionnaires were distributed, but only 92 people correctly completed them. The findings revealed that the most effective relationship with firm success was between human capital as an element of Intellectual capital, while the least effective relationship was between ownership as an element of Intellectual capital. Furthermore, our findings indicate that finance managers should use debts as a last resort in terms of intellectual capital. Finally, our research can be improved by using more controlled variables, a greater sample size, and data from a longer time span in the regression models. Other methods and steps can be used as well.
Influence of Strategic Investment Management Practices on Financial Performan...IOSRJBM
This research aimed at analyzing the influence of Investment management practices on financial performance of manufacturing companies using evidence from Kenya’s sugar industry. The following specific objectives were addressed by this study: to assess the influence of strategic Investment management practices on financial performance of sugar Manufacturing companies in Kenya and to determine the influence of Board structure as a moderating factor on the financial performance of sugar manufacturing companies in Kenya. This study was guided by agency theory. This research adopted a descriptive research design in which a census of all the targeted population of 12 manufacturing companies jointly from sugar manufacturing industry were drawn from a list of 800 manufacturing companies in Kenya, whereby a proportionate random sample of 109 employees were interviewed from all the 12 sugar manufacturing companies in Kenya. Questionnaires were administered as the main tool of data collection whereby 102 questionnaires were collected representing a 93.6% response rate. Descriptive statistical techniques were applied to describe application of strategic financial management practices in the sampled manufacturing companies which were sugar manufacturing companies in this study. Inferential statistical techniques such as Correlation analysis and regression analysis were applied to test the hypotheses of association and differences. Gathered data was processed by computer and the Statistical Package for Social Science (SPSS) which was the main computer software that was utilized in data analysis. The strategic Investment Management practices’ null hypothesis was rejected implying a significant effect on financial performance. Board structure was found significant implying board structure as a moderating value has a significant effect on financial performance.It is therefore recommended that it is important for firms to retain their profits so that they can reinvest and gain higher returns on investments and shareholder equity. This study suggests the need for further research on other economic factors besides Investment management practices that influence the financial performance of sugar manufacturing companies and other companies.
Corporate governance is of great importance for financial performance. Corporate governance issues have attracted public interest in the financial sector both locally and internationally after waves of corporate rip-offs and failures that almost led to loss of confidence in the finance sector. The general objective of this study was to determine the effect of corporate governance on financial performance of Savings and Credit Co-operatives in Kenya. The study adopted a descriptive research design. The study targeted a population of 65 active Savings and credit Co-operatives operating in Embu County. A sample size of 57 Savings and Credit Co-operatives was used in this study. Stratified sampling technique was used to select the sample. Primary data was collected using self-administered semi-structured questionnaires while secondary data was obtained from financial statements and periodicals using a record survey sheet. Pre-testing of research tool was conducted before the actual data collection was carried, to determine the reliability of the questionnaire by use of a Cronbach‘s alpha, statistical coefficient, while the validity was tested to ensure that the questions in the questionnaire provides adequate coverage to the investigative questions. Correlation and multiple regression analysis was used to establish the relationship between independent and dependent variables. The study findings indicated that corporate governance positively affected the financial performance. In specific the board composition and corporate risk management for SACCOs had a positive effect on the financial performances of the SACCOs. The study is beneficial to SACCOs management in improving the performance of Savings and Credit Co-operatives and enabling them to compete globally. The study recommends gender parity consideration and balanced mix of skilled board members during appointments of the board members. The recommendations are important to the government, especially the department of cooperatives in strengthening policies regarding cooperative societies.
Working capital management and profitability an empirical analysisIAEME Publication
This document summarizes a study examining the relationship between working capital management and profitability among Indian manufacturing firms. The study uses financial data from 1,198 manufacturing firms over a 5-year period. Correlation analysis found negative relationships between measures of working capital management (debtor's days, inventory days, creditor's days, cash conversion cycle) and firm profitability. Regression analysis will further examine these relationships to determine how adjusting elements of working capital management could impact profitability. The results aim to provide Indian manufacturers insights on variables that influence their profits.
This document summarizes a research study on the relationship between working capital management and profitability among Indian manufacturing firms. The study uses financial data from 1,198 manufacturing firms over a 5-year period. The study aims to analyze how variables affecting working capital management influence firm profitability. Specifically, it examines the impact of days of debtors, days of inventory, days of creditors, and cash conversion cycle on profitability. The results of the study provide insights for Indian manufacturing firms on managing working capital to improve profitability.
Working capital management profitability an empirical analysisIAEME Publication
This document summarizes a study examining the relationship between working capital management and profitability among Indian manufacturing firms. The study uses financial data from 1,198 manufacturing firms over a 5-year period. Correlation analysis found negative relationships between measures of working capital management (debtor's days, inventory days, creditor's days, cash conversion cycle) and firm profitability. Regression analysis will further examine these relationships to determine how adjusting elements of working capital management could impact profitability. The results aim to provide Indian manufacturers insights on variables that influence their profits.
The document discusses a financial plan analysis for Yonly Glass, a company in Indonesia that processes and installs sheet glass. It analyzes Yonly Glass's financial statements, including income statements and balance sheets, over a five-year period from 2020 to 2024. The analysis shows that Yonly Glass's income and assets will increase each year. Having a glass processing and installation business provides opportunities even during economic downturns like the COVID-19 pandemic. The financial plan is appropriate and suitable for Yonly Glass to execute its business strategy and remain profitable.
1) The document discusses a study examining the link between capital structure and financial performance of Dangote Cement PLC in Nigeria from 2010 to 2019.
2) The study uses return on equity as a measure of performance and the proportion of long-term debt to equity and equity to total capital as measures of capital structure.
3) Preliminary results showed both capital structure measures were positively related to return on equity, but the relationship was not statistically significant.
This document discusses a study on working capital management practices of small scale enterprises in Ghana's Central Region. The study found that 38% of small businesses received an average of 2 weeks to 1 month of credit from suppliers. Small businesses provided credit periods of less than 1 month to 60 days to customers. The main challenges with customer credit were late payments and bad debts. Half of businesses used notebooks for inventory tracking while 57% had business bank accounts. Personal savings made up 60% of startup capital on average. The document recommends increased collaboration between business advisory centers and small business associations to improve financial training as well as expanded record keeping support.
Empirical analysis of the impact of post merger on nigerian banks profitabilityAlexander Decker
This research examines the impact of post-merger performance on Nigerian banks using data from Access Bank and United Bank for Africa between 2005-2012. The study finds that post-merger performance has not significantly impacted banks' profitability. It recommends that only strong banks merge to form mega-banks to achieve promised synergies, and that unethical banking practices be discouraged. The document provides background on reasons for increasing mergers and acquisitions in Nigeria's banking sector, as well as challenges that can arise from the consolidation process.
Working capital management and cash holdings of banks in ghanaAlexander Decker
This document summarizes a study on the relationship between working capital management and cash holdings of banks in Ghana. The study analyzed panel data from 10 Ghanaian banks from 1999 to 2008. The results showed that longer debtor collection periods, longer cash conversion cycles, higher capital structure, and larger bank size were significantly negatively related to bank cash holdings. Meanwhile, longer creditor payment periods and higher profitability had a significantly positive relationship with bank cash holdings. The findings provide insights for bank managers and policymakers on how to effectively manage working capital to ensure adequate liquidity.
Working Capital Management and the Financial Performance of Basic Materials M...ijtsrd
The management of working capital involves managing inventories, accounts receivable and payable, and cash. Based on this assertion, this dissertation is to examine working capital management and the financial performance of basic materials manufacturing companies in Nigeria. The objective of the study is to examine the relationship between working capital management and financial performance of basic material manufacturing companies in Nigeria, The study is anchored with Fisher's separation theory. The study used ex post facto research design which also known as after the effect research, data analyses of financial information were extracted from the manufacturing companies Financial Statements for the years 2001 to 2015. These statements used to examine how an independent variable, present prior to the study, affects a dependent variable. In order to arrive at the testable conclusion, stratified random sampling techniques were adopted. Ordinary Least Square OLS regression model were used in this research work with the model findings, which revealed that debtors, creditors and inventory has no significant relationship with return on investment of manufacturing companies in Nigeria. The study therefore recommended that managers of basic material manufacturing companies in Nigeria should intensify effort on how to improve the management of debtor as a component of working capital components than creditors and inventories in their industry. Olaniyi, Ayo R | Nzewi, Ugochukwu C ""Working Capital Management and the Financial Performance of Basic Materials Manufacturing Companies in Nigeria"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-2 , February 2020,
URL: https://www.ijtsrd.com/papers/ijtsrd30225.pdf
Paper Url : https://www.ijtsrd.com/management/accounting-and-finance/30225/working-capital-management-and-the-financial-performance-of-basic-materials-manufacturing-companies-in-nigeria/olaniyi-ayo-r
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The Effect of Working Capital Management on Profitability of Cement Manufacturing Companies in Kenya
1. IOSR Journal of Economics and Finance (IOSR-JEF)
e-ISSN: 2321-5933, p-ISSN: 2321-5925.Volume 6, Issue 6. Ver. III (Nov. - Dec. 2015), PP 53-61
www.iosrjournals.org
DOI: 10.9790/5933-06635361 www.iosrjournals.org 53 | Page
The Effect of Working Capital Management on Profitability of
Cement Manufacturing Companies in Kenya
Kioko Collins Wanguu1
& Sitienei Edwin Kipkirui2
1-
MSc. Finance Student – University of Nairobi, Kenya
2 -
MBA (Finance) Student – Jomo Kenyatta University of Agriculture and Technology, Kenya
Abstract: Working capital management is concerned with short-term investment and financing decision of an
entity and is a major business requirement and a significant part of corporate finance. Thus, this study sought to
examine the effect of working capital management on profitability of cement manufacturing companies in
Kenya. The study used a sample of the 3 cement manufacturing firm listed at the Nairobi Securities Exchange.
The study used secondary data from the cement manufacturing companies’ audited financial statements for a
period of 15 years from 2000 – 2014. The data collected was analyzed using the Karl Pearson correlation and
the multiple linear regression. The study findings established that inventory conversion period (ICP) positively
and significantly influences profitability while average receivables period (ACP) had a positive insignificant
relationship with profitability. The study findings also revealed that average payables period (APP) had a
significant negative relationship with profitability. In addition, the study findings established a positive
significant relationship between leverage and profitability while liquidity and size of the firm had a positive
insignificant relationship with profitability. The study concluded that inventory days, receivables period,
liquidity, leverage and firm size positively influences profitability while payables period negatively influences
the profitability of cement manufacturing firms in Kenya.
Keywords: Working Capital Management, Profitability, Inventory Conversion Period, Average Receivables
Period, Average Payables Period
I. Introduction
Working Capital is the flow of ready funds necessary for the working of a concern. It comprises funds
invested in current assets, which in the ordinary course of business can be turned into cash within a short period
without undergoing diminishing in value and without disruption of the organization (Mohanty, 2013). Working
capital is a vital element in any organizational setting that requires cogent attention, proper planning and
management (Owolabi and Alu, 2012). A positive working capital indicates the ability of the business to pay off
its short term obligations at most when request comes from suppliers but a negative working capital indicates
the inability of the business organization to pay short term obligations. As such, excessive working capital
indicates an accumulation of idle current assets, which do not contribute in generating income for the firm
during the operating period. Inadequate working capital on the other hand harms the credit worthiness and the
day-to-day activities of firms, which may lead to insolvency (Singh and Asress, 2010).
Working capital management is concerned with short-term investment and financing decision of an
entity and is a major business requirement and a significant part of corporate finance (Sajjad and Bukhari,
2012). WCM covers the planning and controlling activities of companies regarding their current assets and
current liabilities in a manner that guarantees their ability to meet their current obligations satisfactorily as well
as a maximum return on their precious investment in these floating assets. The ultimate goal of working capital
management is to ensure that firms are able to continue their operations with sufficient cash flow that will
service their long-term debts and satisfy both maturing short-term obligations and upcoming operational
expenses (Owolabi and Alu, 2012). WCM is used as an optimization tool to make the most profitable use of
liquid funds while maintaining a minimum level of liquidity to cover possible unexpected short-term
expenditures (Kunze and Peri, 2015).
Efficient working capital management involves planning and controlling of current assets and current
liabilities in a manner to strike a balance between liquidity and profitability (Uchenna et al., 2012). An improper
management of working capital components that is, accounts receivables, accounts payables and inventories will
result to difficulties in the firms continued operations and consequently the market value of the firm will also
suffer (Mohamad and Saad, 2010). The ultimate objective of any firm is to maximize shareholders wealth and
maximizing shareholders wealth can be achieved when a firm maximizes its profit. A firm that wishes to
maximize profit must strike a balance between current assets and current liabilities and hence keeping abreast of
the liquidity and profitability trade-off (Uchenna et al., 2012). Profitability reflects the final outcome of business
operations thus a well designed and implemented working capital management is expected to contribute
positively to the creation of a firm’s value and profitability.
2. The Effect of Working Capital Management on Profitability of Cement Manufacturing Companies…
DOI: 10.9790/5933-06635361 www.iosrjournals.org 54 | Page
1.1.1 Cement Manufacturing Firms in Kenya
In Kenya, the cement history started in the early 1930s when in 1933, East Africa Portland Cement
Company began importing cement as a trading company. Later, in 1951, Bamburi Cement Ltd was founded and
Lafarge a company from France is the principal shareholder of the company (Kinyua, 2007). Currently, there six
cement manufacturing companies with the major manufacturers being Bamburi Cement, East African Portland
Cement and Athi River Mining. The other cement manufacturing firms include Mombasa Cement Company
Ltd, Savanna Cement and National Cement Company Ltd. Cement firms in Kenya operate in markets closely
linked to the economic cycle with a back-forward linkage with many other sectors like energy and transport.
Cement, as a product is one of the indicators of the general developments in the construction industry, since it
mirrors the level of activity in the sector (Kinyua, 2007).
The cement industry in Kenya has been growing in tandem with the construction sector and cement
consumption has been on the increase at an average rate of 14.1% for the period 2006 – 2011, with consumption
reaching 3.43 million tonnes in 2011, up from 1.57 million tonnes in 2006 (Dyer & Blair Investment Bank Ltd,
2012). According to the Kenya Economy Survey (2014) cement consumption and stocks in Kenya increased
from 3,991.2 thousand tonnes in 2012 to 4,266.5 thousand tonnes in 2013 as a result of increased construction
activities. The key drivers of the growth in cement consumption has been attributed to rising demand for
housing and commercial construction boom fuelled by increased foreign investment, and extensive government
and donor-funded spending on the country’s mega infrastructure projects (Dyer & Blair Investment Bank Ltd,
2012).
1.2 Research Problem
Working capital management involves crucial decisions on multiple aspects, including managing
account payables and account receivables, preserving a certain level of inventories and the investment of
accessible cash (Mohamad and Saad, 2010). However, most financial managers place much premium on other
long-term financial decisions, particularly investments and capital structure decisions. According to Madhou,
(2011) in the pursuit of running the day to day business of a firm, CEOs and managing directors fail to pay
attention to the management of working capital. As such, most of the working capital decisions are delegated to
junior employees of the firm and are rarely factored in when major decisions are undertaken by the CEOs. In
addition, large number of business failures in the past has been blamed on the inability of the financial manager
to plan and control the working capital of their respective firms (Owolabi and Alu, 2012).
In Kenya, the cement manufacturing sector has been identified as one of the core industrial sectors,
with ample scope to boost the other sectors of the economy, especially the building and construction industry.
However, the Kenyan cement market is marked by rising competition and over-supply of cement, which
continues to have a depressing effect on prices (SSA Cement Industry Report, 2014). As such, the East Africa
Portland Cement Company one of the major cement manufacturing companies in Kenya has been performing
poorly for years and recently issued a profit warning for the financial year 2014/2015. Thus, the need to
investigate the effect of working capital management on the profitability of cement manufacturing firms in
Kenya.
Additionally, several studies have been carried out internationally, regionally and locally on the effects
of working capital management on profitability of different firms. For instance, globally studies by Shahid
(2011), Hoang (2015), Mansoori and Muhammad (2012) and Gill et al. (2010) obtained varied results on the
relationship between working capital and profitability. Regionally, studies by Egbide et al. (2013), Owolabi and
Alu (2012), Padachi (2006) and Agyemang and Asiedu (2013) also examined the effect of various working
capital components on profitability. Locally, studies by Nyamao (2012), Makori and Jagongo (2013), Owele and
Makokeyo (2015) and Muturi et al (2015) also examined the impact of working capital management on the
profitability of various firms in Kenya. However, the above studies concentrated on different industries hence
their findings cannot be generalized to the cement industry in Kenya. As such, in Kenya, there exist few studies
on the effect of working capital management on the profitability of cement manufacturing companies. Most of
the studies combine cement manufacturing firms with other manufacturing firms hence a gap in literature, which
needs to be sealed. Hence, this study intends to examine: What is the effect of working capital management on
profitability of cement manufacturing companies in Kenya?
1.3 Research Objective
To examine the effect of working capital management on profitability of cement manufacturing
companies in Kenya.
3. The Effect of Working Capital Management on Profitability of Cement Manufacturing Companies…
DOI: 10.9790/5933-06635361 www.iosrjournals.org 55 | Page
II. Literature Review
2.1 Theoretical Review
This study reviews the theory of working capital management and the cash conversion cycle approach
as the underlying theories to explain the concept of working capital management.
2.2.1 The Theory of Working Capital Management
The theory of working capital management emanated from Sagan (1955) and the theory provides the
basis for working capital management research. The theory of working capital management emphasizes the need
for management of working capital accounts and warns that it could vitally affect the health of the company.
Sagan (1955) pointed out the money manager’s operations are primarily in the area of cash flows generated in
the course of business transactions. However, the money manager must be familiar with what is being done with
the control of inventories, receivables and payables because all these accounts affect cash position. Thus, Sagan
(1955) advocated that the management of accounts receivable, accounts payable, inventories and cash is vital for
the operational functions of a firm.
Further, the theory of working capital management argues that the major task of a money manager is to
provide funds as and when needed and to invest temporarily surplus funds as profitably as possible in view of
his particular requirements of safety and liquidity of funds by examining the risk and return of various
investment opportunities. Thus, a money manager should take his decisions on the basis of cash budget and total
current assets position rather than on the basis of traditional working capital ratios (Arabahmadi and
Arabahmadi, 2013).
2.2.2 Cash Conversion Cycle Approach
The cash conversion cycle approach was developed by Richards and Laughlin (1980). Richards and
Laughlin (1980) defined the cash conversion cycle as the net time interval between actual cash expenditures on
a firm's purchase of productive resources and the ultimate recovery of cash receipts from product sales,
establishes the period of time required to convert one dollar of cash disbursement back into a dollar of cash
inflow from a firm's regular course of operations. The CCC comprises the sum of the inventory conversion
period and the receivables collection period, minus the payables deferral period. The inventory conversion
period and the receivables collection period combined are defined as the operating cycle (Le Roux, 2008). The
CCC theory suggests that a cash conversion cycle analysis should be used to supplement the traditional but
static liquidity ratio analysis because it provides dynamic insights.
The Cash Conversion Cycle (CCC) is used as a comprehensive measure of working capital as it shows
the time lag between expenditure for the purchases of raw materials and the collection of sales of finished
goods. The longer the cycle, the larger the funds blocked in working capital (Padachi, 2006). The cash
conversion cycle analysis provides more explicit insights for managing a firm's working capital position in a
manner that will assure the proper amount and timing of funds available to meet a firm's liquidity needs. In
addition, the cash conversion cycle analysis provides more explicit insights for managing a firm's working
capital position in a manner that will assure the proper amount and timing of funds available to meet a firm's
liquidity needs (Le Roux, 2008). Cash conversion cycle indicates the efficiency of management of current assets
hence a shorter the time of cash conversion allows the firms to generate more sales from the amount invested,
which shows that business utilized their resources for generating maximum profit.
2.2 Empirical Review
2.2.1 Inventory Conversion Period
Inventory management is one of the most important factors in working capital management as it is one
of the major components of current assets. A study by Arabahmadi and Arabahmadi (2013) analyzed the
efficiency of working capital management on automobile industry in Iran for the period 2000 to 2009. The
results revealed that inventory management had a positive relationship with working capital. Further, the study
found that the correlation between raw material purchase and working capital was positive. In addition, Muturi,
Wachira and Lyria (2015) also investigated the effect of inventory conversion period on profitability of tea
companies in Meru County for a period of five years from 2009 and 2013. The study findings revealed that
inventory conversion period negatively affected the profitability.
Eneje et al. (2012) also evaluated the effect of raw materials inventory management on the profitability
of brewery firms in Nigeria. A cross sectional data from 1989 to 2008 was gathered for the analysis from the
annual reports of the sampled brewery firms. The study established that the study variable raw materials
inventory management designed to capture the effect of efficient management of raw material inventory by a
company on its profitability is significantly strong and positive and affects the profitability of the brewery firms
in Nigeria. Madishetti and Kibona (2013) examined the relationship between inventory conversion period and
SMEs profitability in Tanzania. The study used a sample of 26 SMEs and secondary data from the SMEs annual
4. The Effect of Working Capital Management on Profitability of Cement Manufacturing Companies…
DOI: 10.9790/5933-06635361 www.iosrjournals.org 56 | Page
financial statements for the period of 5 years from 2006 –2011. The study findings established that there was a
significant negative linear relationship between inventory conversion period and profitability.
2.2.2 Average Collection Period
Muscettola (2014) examined the impact the impact and all the influences of the cash conversion cycle
on the profitability of firms using data from an extensive sample of Italian manufacturing firms. The study
findings established that average receivables period had a significantly positive association with profitability.
Akoto et al. (2013) also examined the relationship between working capital management practices and
profitability of listed manufacturing firms in Ghana. The study used secondary data collected from all the 13
listed manufacturing firms in Ghana covering the period from 2005-2009. The study findings established a
significantly negative relationship between profitability and accounts receivable days.
Ksenija (2013) investigated how public companies listed at the regulated market in the Republic of
Serbia manage their accounts receivables during the recession times. A sample of 108 firms was used and the
accounts receivables policies were examined in the crisis period of 2008-2011. The study findings revealed that
there is a positive but no significant relation between accounts receivables and two dependent variables on
profitability return on total asset and operating profit margin. Madishetti and Kibona (2013) also examined the
impact of average collection period and average payment period on SMEs profitability in Tanzania. The study
findings established that there was a significant negative relationship between average collection period and
profitability.
2.2.3 Average Payables Period
Malik and Bukhari (2014) investigated the impact of working capital management (WCM) on
corporate performance in cement, chemical and engineering sectors of Pakistan. Data was obtained from annual
reports of the companies during 2007-2011. Pooled ordinary least squares method was used to estimate the
relationship between the measures of working capital management and performance. The study findings
established that average payment period negatively and significantly to ROE whereas cash conversion cycle
positively and significantly relate with return on equity. A study by Agyemang and Asiedu (2013) established
that there is a negative relationship between accounts payable days and profitability. This suggested that less
profitable firms wait longer to pay their bills taking advantage of credit periods granted by their suppliers.
Madishetti and Kibona (2013) also established that there is a positive relationship between average payment
period and gross operating profit of SMEs profitability in Tanzania.
2.2.4 Liquidity
Ehiedu (2014) investigated the impact of liquidity on profitability of some selected companies. The
study used secondary data from the selected companies annual reports and accounts. The study findings
established that there was a significant positive correlation between current ratio and profitability, but there was
no definite significant correlation between Acid-test ratio and profitability. Egbide et al (2013) investigated the
relationship between liquidity and profitability based on a sample of 30 manufacturing companies listed on the
Nigeria Stock Exchange for the period 2006-2010. The study findings established that current ratio and liquid
ratio are positively associated with profitability while cash conversion period is negatively related with
profitability of manufacturing companies in Nigeria.
Saleem and Rehman (2011) examined the relationship between liquidity and profitability in the oil and
gas companies of Pakistan. The study findings established that there was a significant impact of only liquid ratio
on ROA while insignificant on ROE and ROI. In addition, the findings established that ROE had no significant
effect on three ratios current ratio, quick ratio and liquid ratio while ROI was greatly affected by current ratios,
quick ratios and liquid ratio. Niresh (2012) also studied the cause and effect relationship between liquidity and
profitability. The study covered 31 listed manufacturing firms in Sri Lanka over a period of past 5 years from
2007 to 2011. The study findings established that there was no significant relationship between liquidity and
profitability among the listed manufacturing firms in Sri Lanka.
2.2.5 Leverage
A study by Vural, Sokmen and Cetenak (2012) investigated the relationship between working capital
management components and performance of the firms by using dynamic panel data analysis. The study
established that leverage as a control variable had a significant negative relationship with firm value and
profitability of firm which meant an increase in the level of leverage will lead to decline in the profitability of
the firm and the value of the firm. Mahmoudi (2014) investigated the relationship between leverage and firm
profitability. The study used Short term debt to equity (STD/E) and long term debt to equity (LTD/E) as
leverage variables. Firm profitability was measured using return on equity (ROE) and return on assets (ROA).
5. The Effect of Working Capital Management on Profitability of Cement Manufacturing Companies…
DOI: 10.9790/5933-06635361 www.iosrjournals.org 57 | Page
The study findings established that there was a significant and negative relationship between leverage and firm
profitability.
Vijayakumar and Karunaiathal (2014) also examined the relationship between leverage and
profitability. The study findings revealed that there was a positive and significant impact of leverage measured
in terms of total debt to total. Overly, the study findings established that there was a positive and statistically
significant relationship between leverage measured in terms of total debt to total capital and return on equity of
most of the selected companies during the study period. The study also disclosed a negative and statistically
significant relationship between leverage measured in terms of short-term debt to total capital and long-term
debt to total capital with return on equity of the most of the selected companies during the study period.
2.2.5 Firm Size
Size of the company has a lot to do with its profitability such that as the company increases in size, the
ROA also increases and vice versa. A study by Attari and Raza (2012) examined the optimal relationship of
cash conversion cycle with firm size and profitability. The study established a significant negative correlation
between the cash conversion cycle and the firm size in terms of total assets which meant that the larger the firm
size, the shorter is the cash conversion cycle in terms of days. Becker-Blease et al. (2010) also examined the
relation between firm size and profitability within 109 SIC four-digit manufacturing industries. The study
established that depending on the measure of profitability, the relation between size and profitability is industry
specific and that profitability is negatively correlated with the number of employees for firms of a given size
measured in terms of total assets and sales.
Babalola (2013) investigated the effect of firm size on the profitability of manufacturing companies
listed in the Nigerian Stock Exchange was analyzed by using a panel data set over the period 2000-2009.
Profitability was measured by using Return on Assets, while both total assets and total sales were used as the
proxies of firm size. The study findings established that firm size, both in terms of total assets and in terms of
total sales, has a positive impact on the profitability of manufacturing companies in Nigeria. Pervan and Visic
(2012) investigated the relationship between firm size and performance. The analysis was conducted for the
2002-2010 period and the results revealed that firm size has a significant positive influence on firm profitability.
2.3 Conceptual Framework
Figure 2.1 shows the conceptual framework
Figure 2.1 Conceptual Framework
III. Methodology
To achieve the study objective this study adopted a quantitative research design. A quantitative
research design addresses research objectives through empirical assessments that involve numerical
measurement and analysis approaches (Zikmund et al., 2011). The target population comprised all the six
cement manufacturing companies in Kenya. A sample of the 3 cement manufacturing firm listed at the Nairobi
Securities Exchange was selected for the study. The 3 firms included Bamburi Cement, ARM Cement and East
African Portland Cement Company. The listed companies were preferred due to availability of secondary data
since they are required to publish their financial reports to the public. The study used secondary data from the
cement manufacturing companies’ audited financial statements. The data covered a period of 15 years from
6. The Effect of Working Capital Management on Profitability of Cement Manufacturing Companies…
DOI: 10.9790/5933-06635361 www.iosrjournals.org 58 | Page
2000 – 2014. The data collected was analyzed using Karl Pearson correlation and multiple linear regression. The
regression model took the following form
Where,
Current Ratio (
Firm Size (FS) = Natural Log of Sales
IV. Results And Discussions
4.1 Summary Statistics
Table 1 shows the summary descriptive statistics from the research findings. The table shows the
number of observations, the minimum and maximum values, the mean and standard deviation.
Table 1 Summary Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
ROA 45 -.067 1.32 .1072 .19599
ICP 45 46 181 93.30 31.714
ACP 45 10 220 47.22 36.067
APP 45 31 149 77.36 30.582
CR 45 .469 9.76 1.958 1.3751
DR 45 .000 3.40 .3309 .5227
Firm size 45 10.49 17.44 15.635 1.2287
Source: Research Findings
The results on table 1 show that the cement manufacturing firms had an average ROA of 0.1072 and a
standard deviation of 0.19599. The results also indicate that the average inventory conversion period (ICP) for
the firms is 93 days with a standard deviation of 31.714 whereas the average collection period (ACP) is 47 days
with a standard deviation of 36.067 while the average payables period (APP) for the firms is 77 days with a
standard deviation of 30.582. The results also show that that the mean current ratio for the firms is 1.375 with a
standard deviation of 1.3751 whereas the average debt ratio is 0.3309 with a standard deviation of 0.5227 while
the average size for the firms is 15.64 with a standard deviation of 1.2287 respectively.
4.2 Correlation Analysis
Correlation analysis was under taken to measure of the strength of a linear association between the
dependent and the independent variables.
Table 2: Correlation Matrix
ROA ICP ACP APP CR DR Firm Size
ROA 1
ICP -.079 1
ACP -.132 .132 1
APP -.215 .297*
.307*
1
CR .156 -.234 -.040 -.126 1
DR .787**
-.293 -.044 -.003 .077 1 .
Firm size .172 .134 -.327*
-.307*
-.107 .038 1
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).
Source: Research Findings
The results on table 2 indicates that inventory conversion period, average collection period and average
payables period had a negative correlation with profitability which means a reduction of inventory days,
7. The Effect of Working Capital Management on Profitability of Cement Manufacturing Companies…
DOI: 10.9790/5933-06635361 www.iosrjournals.org 59 | Page
receivables period and payables period negatively affects profitability of cement manufacturing firms. In
addition, the results established that liquidity, leverage and size of the firm had a positive correlation with
profitability an indication that increase in liquidity, leverage and the size of a firm positively influences the
profitability of cement manufacturing firms in Kenya.
4.3 Regression Analysis
Regression analysis was also carried out to establish the relationship between the dependent and the
independent variables.
Table 3 Summary of the Coefficients of the Regression Model
Variables Coefficients Std Error t-stat P-value
(Constant) -.111 .256 -.432 .668
ICP .002 .001 2.898 .006
ACP .000 .000 -.424 .674
APP -.002 .001 -2.720 .010
CR .018 .012 1.429 .161
DR .321 .033 9.701 .000
Firm size .004 .015 .232 .818
F - value 17.662 P- value .000a
R2
.736
Adjusted R2
.694
a. Dependent Variable: ROA
Source: Research Findings
The results on table 3 show that the R-square value is 0.736, which indicates that 73.6% of the
variation in the dependent variable (ROA) is explained by the independent variables while the remaining 26.4%
is explained by other factors outside the model. The results also show that the F statistics value is 17.662 and the
P value is 0.000<0.005 hence the model is significant in explaining the relationship between working capital
management and profitability. The results also show there is a positive significant relationship between
inventory conversion period (ICP) and profitability, which indicates that inventory days positively influence
profitability. This findings conforms to those of Arabahmadi and Arabahmadi (2013) and Eneje et al. (2012)
who established that inventory management had a positive relationship with working capital however the
finding are inconsistent with those of Madishetti and Kibona (2013) and Muturi et al. (2015) who established a
negative relationship between inventory conversion period and profitability.
The study findings also established that average receivables period (ACP) had a positive and
insignificant relationship with profitability an indication that receivables period positively influences the
profitability of cement manufacturing firms in Kenya. This finding conforms to that of Ksenija (2013) who
established that there is a positive but no significant relation between accounts receivables and profitability but
the findings are conflicting to the findings of Akoto et al. (2013) who established a significantly negative
relationship between profitability and accounts receivable days. The results also established that the average
payables period had a significant negative relationship with profitability, which indicates that payables period
negatively influences profitability. This observation is similar to those of Malik and Bukhari (2014) and
Agyemang and Asiedu (2013) who established a negative relationship between average payable days and
profitability.
The results also revealed that there is a positive and significant relationship between leverage and
profitability which is an indication that leverage positively influences profitability of cement manufacturing
firms in Kenya. In similar are the findings of Vijayakumar and Karunaiathal (2014) who established that there
was a positive and significant impact of leverage measured in terms of total debt to total capital with the return
on equity of both the Indian paper industry and the large scale sector. However, the findings are contradictory to
those of Mahmoudi (2014) and Vural et al. (2012) who established a negative and significant relationship
between leverage and profitability. The study also established liquidity and size of the firm had a positive
insignificant relationship with profitability, which means that an increase in liquidity and the size of the firm
positively influences profitability of cement manufacturing firms in Kenya.
V. Summary And Conclusion
The study established that inventory conversion period (ICP) positively and significantly influences
profitability whereas average receivables period (ACP) has a positive and insignificant relationship with
profitability. The study also revealed that average payables period (APP) has a significant negative relationship
with profitability, which indicates that payables period negatively, influences profitability. In addition, the study
established that positive and significant relationship between leverage and profitability while liquidity and size
of the firm have a positive insignificant relationship with profitability. Thus, the study concludes that inventory
period, receivables period, liquidity, leverage and firm size positively influences profitability while payables
8. The Effect of Working Capital Management on Profitability of Cement Manufacturing Companies…
DOI: 10.9790/5933-06635361 www.iosrjournals.org 60 | Page
period negatively influences the profitability of cement manufacturing firms in Kenya. The study recommends
that the management of cement manufacturing firms in Kenya should effectively manage working capital items
to ensure that they maximize profitability.
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