ABSTRACT
The aim of the study is to unveil the impact of Working Capital Management on a company’s profitability using Lovonus Trust and Investment Limited as the case study of the research work. The research questions include: What is the significance of Working Capital Management to Lovonus Trust and Investment; should receivables be allowed to stay longer than payables? Should stringent policy be adopted for liquidity and profitability of the firm? In order to achieve this objective, a sample size of 200 copies of questionnaire were administered. 141 were duly completed and returned. Spearman ranking correlation and simple percentage method were used. A 5-point Likert Scale was used to collect and validate information from the respondents. It was found that; poor inventory cycle is a major problem of Working Capital Management; Working capital affects the business position of a firm and also over capitalization can deter the objective of efficient working capital management policy. On the basis of the findings, it is recommended that a define working capital management policy should be adopted, administered and strictly adhered to as well as adequate attention be given to cash management, stock management and total quality management to ensure a smooth working capital operation.
TABLE C CONTENTS
Title Pagei
Certificationii
Dedication iii
Abstract iv
Acknowledgement v
Table of contentvi
CHAPTER ONE: INTRODUCTION
11 Background of Study 1
1.2 Statement of problem; 3
1.3 Objective of study 3
1.4 Research Questions 4
1.5 Scope of Study 5
1.6 Significance of Study 5
1.7 Limitation of Study 6
1.8 Historical background of Lovonus Trust and
Investment Limited 6
1.9 Operation definitions of terms 7
CHAPTER TWO: LITERATURE REVIEW
2.1 Conceptual views 10
2.2 Scholars view on Working Capital Management 11
2.3 Definition of Working Capital14
2.3.1 Definition of Working Capital Management 14
2.3.2 Key variables of Working Capital Management 15
2.3.3 Analysis Schedule of liquidity Rations (key variables) 15
2.4 Operating and cash conversion cycles 18
2.5 Working capital operating cycles diagram 18
2.6 Diagrammatical Representation and operating
and cash conversion cycles 19
2.7 Operating and cash conversion cycles tables 20
2.8 Key challenges of working capital20
2.9 Factors affecting the amount of investment in working
capital23
2.10 Sources of working capital finance 23
2.11 Financing of working capital 23
2.12 Management decision on working capital 24
2.13 Management of the components of working capital 24
2.14 Total Quality Management (TQM) 27
2.15 An overview Financial Statements 28
2.15.lComponents of financial statements28
2.16 Lovonus Trust and Investment Financial Statement 29
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction 33
3.2 Research design 33
3.3 Population and Sample of the Study 33
3.4 Sources of data collection 34
3.5 Method of data collection 34
3.6 Method of data Analysis! Research instrument 35
37 Statistical tools! Analytical procedure 35
CHAPTER FOUR: DATA ANALYSIS AND PRESENTATION
4.1 Introduction 36
4.2 Data Presentation Analysis and interpretation 36
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary of findings 46
5.2 Conclusion 47
5.3 Recommendation 48
Bibliography 49
Appendices 51