Working Capital Management and Profitability of Sembule Steel Mills Ltd, Kampala- Uganda.
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Date
2013-05
Authors
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Publisher
Kampala International University, College of Economics and Management Sciences .
Abstract
The study examined the relationship between working capital
management and profitability of manufacturing firms and it was based on four
specific objectives: (a) to determine the demographic characteristics of the
respondents in terms of age, gender, educational qualifications, and years in
the present position; (b) to determine the current level of working capital
management of the firms; (c) to determine the extent of profitability; and (d)
to establish if there is a significant relationship between the levels of working
capital management and the extent of profitability of selected manufacturing
firms. The study employed a descriptive correlation research design. SAQ were
used to collect primary data from 100 out of 134 employees, using simple
random sampling. Data analysis was done using SPSS's frequencies and
percentages; means and PLCC.Findings revealed that majority of the
respondents were male, falling in the age bracket of 20 - 30 years, with
bachelor's degree, and experience between 2 - 4 years. Also means and
standard deviation showed that the level of both working capital management
and profitability of the manufacturing firms were satisfactory. PLCC revealed a
positive and significant relationship between working capital and profitability in
the selected manufacturing firms while regression analysis showed that
working capital contribute 49.6% to profitability. Basing on the above findings,
the researcher made the following recommendations: (i) Manufacturing firms
need to install automatic methods of inventory management and use bin cards
to improve their efficiency and effectiveness; (ii) internal control system be
strengthened i.e authorization, physical checking, and dispatch of goods should
be controlled to ensure proper management of inventory management; (iii)
firms should control costs in order to minimize the losses and (iv) firms should
keep the price/earnings ratio of the organization high in order to optimise the
working capital high.
Description
A research report Presented to the College of Economics and Management Kampala International University Kampala, Uganda in Partial Fulfillment of the Requirements for the Bachelors of Business Administration, Marketing Option.
Keywords
Working Capital Management, Profitability, Steel Mills, Kampala- Uganda