ANALYSIS OF THE EFFECT OF WORKING CAPITAL MANAGEMENT ON THE PROFITABILITY OF MANUFACTURING FIRMS IN SIERRA LEONE / ABDUL SHERIFF KAMARA; SUPERVISOR: ASSOC. PROF. DR. ASİL AZİMLİ

Yazar: Katkıda bulunan(lar):Dil: İngilizce 2023Tanım: vii, 55 sheets; 31 cm. 1 CD-ROMİçerik türü:
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Konu(lar): Tez notu: Thesis (MSc) - Cyprus International University. Institute of Graduate Studies and Research Accounting and Finance Department Özet: ABSTRACT Working Capital Management (WCM) is a crucial and direct propeller of an organization's profitability and liquidity; ineffective working capital (WC) causes detrimental influence on profitability and remained a challenge for businesses of developing companies. Thus, this study analyzed the impact of WCM on profitability of manufacturing firms in Sierra Leone using a Panelized Least Square (PLS) technique. The PLS estimate revealed that a unit percent increase in the cash conversion cycle resulted in a 5.24% rise in the profitability level of manufacturing firms in Sierra Leone. Also, an increase in the account payable of a unit percent results in a 0.83% decrease in profitability level of manufacturing firms in Sierra Leone. Similarly, the PLS estimate also revealed that the account receivable had a significant negative influence on the profitability of Sierra Leone's manufacturing firms. This suggests that a unit percent decrease in the account receivable caused a 1.67% improvement in the level of profitability for Sierra Leone's manufacturing firms. More so, current ratio was found to show a significant and favorable effect on the profitability of Sierra Leone's manufacturing firms. The upshot of this is that an increase in the current ratio of Sierra Leone's manufacturing firms tends to dramatically raise their profitability levels. These findings are consistent to existing literatures. Therefore, the study concluded that cash conversion cycle, account payable, account receivables and current ratio significantly affect the profitability of the Sierra Leone’s manufacturing firms. Consequently, the study recommended that manufacturing firms in Sierra should improve its profit by ensuring that its existing assets are converted to cash promptly, thereby increasing the businesses’ WC. Also, manufacturing firms in Sierra Leone should ensure key procedures that will aid the accounts payable to influence or increase WC so as to free up cash. These procedures may include, contract evaluations, sourcing, procurement, invoicing, accounting, and reporting. Keywords: Profitability, PLS, WCM
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Thesis (MSc) - Cyprus International University. Institute of Graduate Studies and Research Accounting and Finance Department

Includes bibliography (sheets 50-55)

ABSTRACT
Working Capital Management (WCM) is a crucial and direct propeller of an
organization's profitability and liquidity; ineffective working capital (WC) causes
detrimental influence on profitability and remained a challenge for businesses of
developing companies. Thus, this study analyzed the impact of WCM on profitability
of manufacturing firms in Sierra Leone using a Panelized Least Square (PLS)
technique. The PLS estimate revealed that a unit percent increase in the cash
conversion cycle resulted in a 5.24% rise in the profitability level of manufacturing
firms in Sierra Leone. Also, an increase in the account payable of a unit percent
results in a 0.83% decrease in profitability level of manufacturing firms in Sierra
Leone. Similarly, the PLS estimate also revealed that the account receivable had a
significant negative influence on the profitability of Sierra Leone's manufacturing
firms. This suggests that a unit percent decrease in the account receivable caused a
1.67% improvement in the level of profitability for Sierra Leone's manufacturing
firms. More so, current ratio was found to show a significant and favorable effect on
the profitability of Sierra Leone's manufacturing firms. The upshot of this is that an
increase in the current ratio of Sierra Leone's manufacturing firms tends to
dramatically raise their profitability levels. These findings are consistent to existing
literatures. Therefore, the study concluded that cash conversion cycle, account
payable, account receivables and current ratio significantly affect the profitability of
the Sierra Leone’s manufacturing firms. Consequently, the study recommended that
manufacturing firms in Sierra should improve its profit by ensuring that its existing
assets are converted to cash promptly, thereby increasing the businesses’ WC. Also,
manufacturing firms in Sierra Leone should ensure key procedures that will aid the
accounts payable to influence or increase WC so as to free up cash. These procedures
may include, contract evaluations, sourcing, procurement, invoicing, accounting, and
reporting.
Keywords: Profitability, PLS, WCM

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