Working Capital Management and Profitability of Sembule Steel Mills Ltd, Kampala- Uganda.

Thumbnail Image
Journal Title
Journal ISSN
Volume Title
Kampala International University, College of Economics and Management Sciences .
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.
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.
Working Capital Management, Profitability, Steel Mills, Kampala- Uganda