of this paper is to analyze the effect of working capital management on profitability
of manufacturing companies for a sample of Nine firms listed on Nairobi Securities
Design/methodology/approach – The paper includes a conceptual as well as empirical analysis, in
which data from a sample of listed firms for the period from 2006 to 2010 are analyzed
to examine the effect of working capital management on profitability of manufacturing
firms. The author used OLS regression techniques to test assumptions and several different
models were also run.
Findings – The
study reveals that effective working capital management
has great impact on profitability. He suggested that managers
should focus on managing working capital components to achieve profitability of
Originality/value – The paper's originality and value lies in suggesting that financial
managers should pay more attention to working capital management of manufacturing
firms and other companies in general to optimize
the value of the share holders
and maintain a favorable trade-off between liquidity and profitability
Working Capital Management; Profitability; Average Collection Period: Average Payment Period; Cash Conversion Cycle, Inventory turnover in Days
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