Business, Management and Accounting
5 years ago

Efficient working capital management boosts profitability for Ghanaian manufacturers!

International Journal of Finance and Banking Research
Effect of Working Capital Management on Profitability of Listed Manufacturing Companies in Ghana
Jacob Akomeah

Paper Summary

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Working capital management affects how profitable manufacturing companies in Ghana are. By studying data from 7 listed firms over 10 years, researchers found that longer account receivables and inventory conversion periods hurt profitability, while longer account payables periods don't have much impact. On the other hand, a longer cash conversion cycle, higher current ratio, and larger firm size all lead to higher profitability. To make more money, manufacturing companies in Ghana should focus on managing their working capital components efficiently.