AN EVALUATION OF WORKING CAPITAL POLICIES AND THEIR IMPACT ON PROFITABILITY OF FIRMS

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dc.contributor.authorSURAJO, SANUSI,
dc.contributor.authorMUHAMMAD
dc.date.accessioned2014-02-07T08:59:19Z
dc.date.available2014-02-07T08:59:19Z
dc.date.issued2006-08
dc.descriptionDEPARTMENT OF ACCOUNTING FACULTY OF ADMINISTRATION AHMADU BELLO UNIVERSITY ZARIA.en_US
dc.description.abstractABSTRACT The management of current assets and short term funds is as important as that of fixed assets and long term funds. Therefore, the need for effective working capital management cannot be overemphasized in manufacturing companies for realization of their objectives. The effectiveness of that working capital management depends largely on proper financing of working capital. It was therefore considered appropriate in this research to evaluate the impact of working capital financing policies on profitability of manufacturing firms in Nigeria. The main objective of the study was to come up with evidences that establish the relationship between working capital policy and profitability of a firm, and identify the working capital policy that contributes most to the profitability of a firm under different conditions. To achieve this objective, six (6) manufacturing companies that are quoted in the Nigerian Stock Exchange were selected as a case study, and a sample of one hundred and fifty (150) respondents who were employees of the companies was used in the study. Thus, data from primary sources were analyzed using simple descriptive research design. In addition, three (3) hypotheses were formulated and tested for significance using the ttest statistic technique. The secondary data were collected from the published financial statements of the companies under study and analyzed using correlation coefficient and financial ratios for the period 1999 to 2003. The research revealed that companies using different working capital policies had different profitability, which concluded that there is significant relationship between working capital policy and profitability of manufacturing company, and such relationship depends on the operating performance of the firm. It was also discovered that manufacturing companies that adopt conservative working capital policy are more profitable especially when the demand for company’s product is high. Finally, the researcher recommended that manufacturing companies should employ qualified financial managers so as to effectively control cost of production and balance the trade off between cost of sales and quality of products manufactured in order to boost sales. It was also recommended that factors affecting working capital needs should be critically studied, so that investment in working capital would be appropriate to avoid high risk of uncertainties.en_US
dc.identifier.urihttp://hdl.handle.net/123456789/556
dc.language.isoenen_US
dc.subjectEVALUATION,en_US
dc.subjectWORKING,en_US
dc.subjectCAPITAL,en_US
dc.subjectPOLICIES,en_US
dc.subjectIMPACT,en_US
dc.subjectPROFITABILITYen_US
dc.subjectFIRMSen_US
dc.titleAN EVALUATION OF WORKING CAPITAL POLICIES AND THEIR IMPACT ON PROFITABILITY OF FIRMSen_US
dc.title.alternativeA Study of Some Selected Manufacturing Companies in Nigeriaen_US
dc.typeThesisen_US
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