Abstract: Working capital management influences the financial performance of Sulfo Rwanda Industries Ltd because it affects inventory management, accounts receivables management and the cash conversion cycle function. This research aims to examine the effect of working capital management on financial performance of Sulfo Rwanda Industries Ltd. The study used correlation design with a quantitative approach. The sample size was 101 which included 8 members of management and 93 other staff of Sulfo Rwanda Industries Ltd and only 92 respondents participated in the study. Purposive sampling technique was used to select respondents. The close-ended questionnaire was used for collecting data. Data was analyzed using descriptive analysis and inferential statistics. The findings revealed that, inventory management has a significant effect on the financial performance of Sulfo Rwanda Industries Ltd (β=.229, p<.05). Second, accounts receivables management also has a significant effect on the financial performance of Sulfo Rwanda Industries Ltd (β=.066, p<.05). Third, cash conversion cycle management has a significant effect on the financial performance of Sulfo Rwanda Industries Ltd (β=-.146, p>.05). The study recommends strengthening and optimizing inventory management practices, enhancing credit assessment processes, addressing supply chain challenges and adopting effective cash flow forecasting and budgeting practices. This study's contribution lies in its potential to benefit Sulfo Rwanda Industries Ltd by guiding effective working capital management for improved financial stability and efficiency. Additionally, it offers valuable insights for manufacturing firms in Rwanda, aiding policy-making for optimized working capital and better financial outcomes, while also enriching academia's understanding of the field and providing a foundation for further research. Nevertheless, there is need to conduct more research on factors that moderate the relationship between working capital management practices and financial performance as well as conducting a comprehensive cross-sectional survey encompassing a diverse range of firms across various industries and geographical settings to improve reliability of findings.
Keywords: Working capital management, financial performance, Sulfo Rwanda Industries, improve reliability of findings.
Title: EFFECT OF WORKING CAPITAL MANAGEMENT ON FINANCIAL PERFORMANCE OF SULFO RWANDA INDUSTRIES LTD
Author: ISARO DIANE
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
Vol. 12, Issue 1, April 2024 - September 2024
Page No: 69-79
Research Publish Journals
Website: www.researchpublish.com
Published Date: 16-May-2024
