The Relationship between Working Capital Management and Financial Sustainability of Selected Christian Denominations in Ghana

Peprah, Williams Kwasi; Anowuo, Isaac; Ameyaw, Daniel A.K.

doi:10.11114/afa.v5i2.4410

Cited by 1 publication

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References 11 publications

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“…In another Sub-Saharan African country, Ghana, a study by Peprah and Riziki (2019) found that there was a small but significant negative relationship between working capital management and profitability, while Yeboah and Yeboah (2014) concluded that although some components of working capital management such as cash conversion cycle and payables payment period had a statistically significant relationship with profitability, the receivables collection period did not. Similarly, although the cash operating cycle and receivables collection period had a significantly positive relationship with bank profitability, the payables payment period exhibited a significantly opposite relationship with profitability (Agyei and Yeboah, 2011).…”

Section: Literature Surveymentioning

confidence: 99%

Working Capital Management and Profitability of Banks in Zambia

2023

RJFA

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The objective of this research was to assess how the management practices related to working capital impact the profitability of banks in Zambia. The primary research question guiding this study was: To what degree do the policies and practices regarding working capital management influence the profitability of banks in Zambia? In order to address this question, the study calculated the Return on Average Assets as a metric to measure bank profitability, which served as the dependent variable. Receivables collection period, payables payment period, and cash conversion cycle were adopted as predictor variables, while leverage, bank size, growth and credit risk were the control variables. Descriptive statistics, correlation analysis and fixed effects regression modelling using dummy variables were then used to analyse panel data for 14 commercial banks in the country for the period 2010 to 2021.Based on the findings, the study concluded that overall, effective management of working capital had a statistically significant positive impact on the profitability of banks in Zambia. With respect to individual working capital elements, it was observed that the period for collecting receivables and the duration of the cash conversion cycle had a negative and significant influence on bank profitability. Conversely, the period for making payments on payables had the opposite effect, positively impacting bank profitability.Additionally, the study discovered that when the receivables collection period and payables payment period were utilized instead of the cash conversion cycle in the regression analysis with return on average assets, there was a greater increase in R-square change and squared multiple partial R. This indicates that managing receivables and payables as distinct components of working capital is more advantageous for the banking sector in Zambia compared to employing the cash conversion cycle.

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Section: Literature Surveymentioning

confidence: 99%

Working Capital Management and Profitability of Banks in Zambia

2023

RJFA

View full text Add to dashboard Cite

show abstract

The Relationship between Working Capital Management and Financial Sustainability of Selected Christian Denominations in Ghana

Cited by 1 publication

References 11 publications

Working Capital Management and Profitability of Banks in Zambia

Working Capital Management and Profitability of Banks in Zambia

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