Abstract: This study aimed at examining effects of working capital management on organizational performance. Both primary data and secondary data were collected and analysed to achieve our objectives. By using SPSS 16, the results from analysis of primary data showed that company sells more on cash than on credit, liabilities are well managed even in short period, and there is a good inventory management which helps the company to improve its performance.The findings showed that DR (-0.232) and CCC (- 0.292) have a negative effect on GOP while DP and DI are positively related to GOP (0.301, 0.165 respectively). LNSALES (0.135) has a positive effect on GOP while inflation (-0.00632) has a negative effect on GOP. Therefore, the reduction of the days in accounts receivable will facilitate the company to have ready cash to reinvest and can prevent the cash from getting eroded by effects of inflation as well as benefit from cheap source of financing. The increase in inventory levels also will help the company to create value but this requires efficient level that can maximize returns and minimize the costs of keeping it considering the effects of inflation. Thus working capital management is viewed as an effective lever to increase cash flow and preserve, or even to enhance company value.
Keywords: Working capital Management, organizational performance.
Title: Effect of Working Capital Management on Organizational Performance
Author: Twahirwa Egide, Dr. Tobias Olweny, Dr. Mbabazi Mbabazize Peter
International Journal of Thesis Projects and Dissertations (IJTPD)
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