Full Project-THE INFLUENCE OF WORKING CAPITAL MANAGEMENT ON PROFITABILITY OF COMPANIES: ISSUE. CHALLENGES AND STRATEGIES.
Click here to Get this Complete Project Chapter 1-5
THE INFLUENCE OF WORKING CAPITAL MANAGEMENT ON PROFITABILITY OF COMPANIES: ISSUE. CHALLENGES AND STRATEGIES.
This study titled ‘influence of working capital management on profitability of companies; issues, challenges and strategies examined the various ways by which working capital can be managed to enhance profitability, evaluate the need for the management of working capital, and also identified the hindrances to proper management of account receivables in seeking for information needed for the study , primary and secondary means of data collections were adopted such as oral interview, questionnaires and simple size observation, ESUT library and internet played a great role in data collection. The Taro Yamane’s formula was use in determining the chi-square statistic was adopted in presentation and analysis of data. Findings showed that proper management of account receivable aids efficient and effective operations in CADBURY NIGERIA PLC and that Mis-management of account payable decreases the profitability of firms to a high extent. It was concluded that the primary responsibility of preventing deficiencies and bringing new idea is with the management but financial manager play a very vital role on property management of working capital in an organization.
2.1 Background of the Study
Working capital is a financial metric which represents the operating liquidity available to a business concern. As regarding fixed assets such as plants and equipment working capital is considered as a part of a company’s operating capital, referring to current assets such as cash at hand, cash on bank account raw materials working progress, finished goods, account receivable etc. To measures the efficiency of company’s working capitals, net working capital is often used which is defined as the difference between current assets and current liabilities if current assets are higher than current liabilities, the company has working capital efficiency explaining the company’s ability to continue its operations and to have sufficient funds to satisfy both maturing short term debt and upcoming operational expenses.
Working capital management involves planning and controlling current assets and current liabilities in a manner that dominates the risk of liability to meet due short-term obligations on one hand and avoid excessive investment in these assets on the other hand. According to (Elijelly, 2004) there is a combination of policies and techniques for the management of a company’s working capital. These policies involves inventory management debtor’s management etc. a popular measures of working capital management is the cash conversion cycle, which tells how cash is moving through a company in terms of duration.
In essence, the research tried to examine working capital management issues, specially how a company manages its working capital by shortening or lengthening its cash conversation cycle in order to contribute for a superior operating profitability. Management seeks to contain an optimum balance of cash working capital component thereby ensuring that firm operates with sufficient fund (cash flow) that will service their long-term debt and satisfy both maturing short-term obligation and upcoming operational expenses. Therefore, makes it more glaring that working capital has a pivotal role to play in a company’s drive to achieve great or high profitability.
One can then say that decision relating to working capital must not be taken for granted. To this end, Arnold (2005) assets that if there is too little working capital or lack of working capital can account for inefficiencies in a company’s operation when it is not able to play-off. Its due obligations. On the other hand, without sufficient working capital, the company will not either be able to provide goods or service required to customers due to lack of money to buy materials for producing goods. The company’s profitability can be jeopardized as a result. Therefore the ultimate goal of working capital management is to ensure that firm’s are able to continue their operations with sufficient cash-flow that will service their long-term debts and satisfy both maturing short-term obligation (debts) and upcoming operational expenses. Hence, organization should try as much as possible to meet up with this goal so as to avoid being caught up in the trap of ineffective management of working capital components.
2.2 Statement of the Problem
This study will try to provide solution to the problem listed below.
i. Hindrances of improper working capital management lead to bankneptey and close down of companies.
ii. Inefficient management of working capital effect the profitability of a company.
iii. With the high rate of corruption in our country can working capital management be wholly implemented?
2.3 Objective of the Study
The main objective of this study is to find out whether working capital management can impact on manufacturing companies profitability. Specially to determine:
i. The relationship between account receivable period and profitability.
iii. Relationship between inventory period and profitability.
iv. Relationship between cash conversation cycle and profitability.
2.4 Research Questions
The following research questions of this study are:
i. To what extent do proper management of account receivable impact positively on profitability of firms?
ii. To what extent do proper management of account payable period increase positively on profitability of firms
iii. Can management increase in inventory period and profitability of a firm?
iv. Can proper management increase positively in cash conversation cycle and profitability of firms?
2.5 Research Hypothesis
Hypothesis is a kind of questing thoughts formulated by the researcher in line with the research question. It is classified as follows.
Positive and negative hypothesis positive hypothesis (Alternative) while negative hypothesis means no (null).
Ho: proper management of account receivable does not enhance profitability of firms.
Hi: proper management of account receivable enhance profitability of firms.
Ho: Mismanagement of account payable does not decrease the profitability of firm’s
Hi: Mismanagement of account payable decrease the profitability of firm’s.
Ho: Management of cash and cash equivalents does not enhance profitability of firm’s.
Hi: Management of cash and cash equivalents enhance profitability of firm’s.
1.6 Significance of the Study
This study is of importance to the researcher as it equips her with the knowledge of the problems of working capital management to the cabric Nigeria Ltd companies. It will also be importance to various people in the society such as the government and owners of industries. It will reveal the problems of working capital management on profitability companies of working capital management on profitability companies and this knowledge will be vital to the general public and private sectors. It will also provide a model for an efficient and effective management of working capital. It will be significant to other researcher and studies who may want to use it as a reference.
1.9 Scope And Limitations of the Study
A good research to be delimited to a manageable scope delimitation of research refers to the definition of the scope (extent or boundary) covered by the research in other words, the research respondents are going to be concerned with making decisions in the companies.
The researcher faced the following challenges/limitation during the process of data collection.
Due to the economic situation of Nigeria and other academic issue like (buying of textbooks, paying of school fees), that requires financial attention, the researcher encountered financial challenges.
Secondary, due to inability to reach all the members of the sample owing to some circumstance, the resulting sample was not quite of cooperation from some respondents, somehow limited this exercise.
Finally, due to the limited time induced to complete and present the research work, the researcher curtailed her efforts to the most sensitive aspects of the topic. Notwithstanding; the above constraints, the research did her best to present worthwhile and comprehensive work.
1.10Definition of Terms
Working capital: Working capital is the total amount of cash tied up in current assets and current liabilities and is calculated by deducting the total amount of current liabilities from the total current assets.
Account payable: Is money by a business to its supplier shown as a liability on a company’s balance sheet.
Collection policy: Is the steps that a company follows in ensuring timely payment of its account receivable or procedures a firm follows in attempting to collect account receivable.
Account receivable: Are money which his owed to a company by a customer for product and service provided. It is been shown as current liabilities.
Management: This is the decision making body of an organization it is a group of people who manage the company affairs.
Cash conversation cycle;Is a company that measure how long a firm will be deprived of cash if it increases its investment in resources, in order to expand customer sale
Operating cashflow Ration;Is use to measure how well current liabilities are covered by the cashflow generated from a company operation.
Credit policy; Is a clear , written guidelines that set the term and condition for supplying goods on credit.
Get the Complete Project
This is a premium project material and the complete research project plus questionnaires and references can be gotten at an affordable rate of N3,000 for Nigerian clients and $8 for International clients.
Click here to Get this Complete Project Chapter 1-5
You can also check other Research Project here:
1, Accounting Research Project
- Adult Education
- Agricultural Science
- Banking & Finance
- Biblical Theology & CRS
- Biblical Theology and CRS
- Biology Education
- Business Administration
- Computer Engineering Project
- Computer Science 2
- Criminology Research Project
- Early Childhood Education
- Economic Education
- Education Research Project
- Educational Administration and Planning Research Project
- English Education
- Environmental Sciences Research Project
- Guidance and Counselling Research Project
- History Education
- Human Kinetics and Health Education
- Maritime and Transportation
- Marketing Research Project 2
- Mass Communication
- Mathematics Education
- Medical Biochemistry Project
- Organizational Behaviour
- Other Projects
- Political Science
- Public Administration
- Public Health Research Project
- More Research Project
- Transportation Management
Need a Project Writer for a Different Topic
- MSC PROJECT WRITING SERVICES
- MBA RESEARCH PROJECT WRITING SERVICES
- Research Project Writing Services in Lagos Nigeria (Professional Writers) -Law, MSc, MBA,PhD, Dissertations, Thesis, Assignment, Speech
- Masters Research Project Writer in Lagos Nigeria
- MBA Research Project Writer in Lagos Nigeria
- LOOKING FOR A WRITING SERVICES FOR AN URGENT ASSIGNMENTS OR PROJECT WORK
- PROFESSIONAL WRITING SERVICES IN LAGOS NIGERIA (TERM PAPER, SPEECH WRITING, ASSIGNMENT, THESES, DISSERTATIONS, RESEARCH PROPOSAL, PROJECT WRITING SERVICES etc)
- BUSINESS ADMINISTRATION RESEARCH PROJECT WRITER IN LAGOS NIGERIA
- CONSULT A RESEARCH PROJECT WRITER IN LAGOS NIGERIA (PH.D, MBA, MSC, M.ED, BSC)
- MANAGEMENT RESEARCH PROJECT WRITER IN LAGOS NIGERIA
- Education Research Project Writer in Lagos Nigeria
- Environmental Sciences Research Project Writer in Lagos Nigeria
- Guidance and Counselling Research Project Writer in Lagos Nigeria
- Human Kinetics and Health Education Project Writer in Lagos Nigeria
- Early Childhood Education Research Project Writer in Lagos Nigeria
- Christian Religious Studies(CRS) Research Project Writer in Lagos Nigeria
- Educational Administration and Planning Research Project Writer in Lagos Nigeria
- Political Science Research Project Writer in Lagos Nigeria
- Accounting Research Project Writer in Lagos Nigeria
- Economics Research Project Writer in Lagos Nigeria
- Management Research Project Writer in Lagos Nigeria
- Marketing Research Project Writer in Lagos Nigeria
- Public Administration Research Project Writer in Lagos Nigeria
- MBA Research Project Analysts
- In Need of MBA Research Project Writer in Nigeria
- MBA Dissertation Research Project Writer
- MBA Project writer
- EDUCATION DEPARTMENT PROJECT WRITING SERVICES
- BACHELOR OF SCIENCE (BSC) DEGREE PROJECT WRITING SERVICES(B.ED,B.A,B.SC)
- MASTER OF BUSINESS ADMINISTRATION (MBA) RESEARCH PROJECT WRITING SERVICES
- MASTER OF SCIENCE (MSC) RESEARCH PROJECT WRITING SERVICES
- POST GRADUATE RESEARCH PROJECT WRITER
- POST GRADUATE DIPLOMA (PGD) RESEARCH PROJECT WRITER
- MASTER RESEARCH PROJECT WRITER
- MASTER DEGREE RESEARCH PROJECT WRITING SERVICES
- POSTGRADUATE RESEARCH PROJECT WRITING SERVICES
- MASTERS RESEARCH PROJECT WRITING SERVICES
- RESEARCH PROJECT WRITER
- EXPERT IN RESEARCH PROJECT/THESIS/DISSERTATION WRITING SERVICES IN LAGOS NIGERIA
- HIRE A PROFESSIONAL BSC/HND RESEARCH PROJECT WRITER
- HIRE A PROFESSIONAL MBA/MSC RESEARCH PROJECT WRITER
- HIRE A PROFESSIONAL THESIS WRITER IN LAGOS NIGERIA
- SC/M.SC/MBA/PGD RESEARCH PROJECT WRITER IN LAGOS NIGERIA
- Master Degree Research Project Specialist/Writer in Lagos, Nigeria
- Hire A Research Project Writer in Lagos Nigeria
- Research Project Specialist in Lagos, Nigeria