EFFECTS OF WORKING CAPITAL MANAGEMENT ON THE PROFITABILITY OF MANUFACTURING COMPANY

ABSTRACT
The study investigated the Effects of Working Capital Management on the profitability of manufacturing Company, Cadbury Nigeria Plc. was selected as a Case study. The specific objectives of the study are to identify the various components of working capital in Cadbury Nigeria PLC; evaluate the impact of working capital management on the profitability of Cadbury Nigeria PLC. The study adopted the ex-post factor research design. Three hypotheses were formulated and tested; the reason for using this method is to enable the researcher compare and group information and data accordingly. The computation of ratios was limited to those that have to do with working capital of the company. At the end of the study, the researcher found out that STO, AP and LQ had significant negative relationships with the industries’ profitability ratio at 1% level of significance. On the other hand, the company’s AR had significant and positive relationships with the profitability ratio at 1% levels of significance. CCC had negative but non-significant relationship with the company’s profitability ratio. Based on the findings the following recommendations were made that the company should reduce the period between the time cash is paid out for raw material and the time cash is recorded from sales of the company’s product. This will provide funds for regeneration and increasing working capital of the firm there after, the company should pay more attention to its liquidity position and improve on it.