ABSTRACT

Effective working capital management as a tool for enhancing profitability in business with a case study of Goodluck Agro-feeds Nig. Ltd. Osisioma Industrial layout Aba). The specific objective of this project are: To establish the link between profitability and the working capital of the business enterprise so as to determine whether or not effective management of working capital will enhance profit maximization in the business enterprise. To ensure that there is effective working capital management in order to increase profitability margin of the enterprise. The study also intend to establish a good procedure of working capital management which if judiciously followed will lead to operational cost reduction, as profit is said to be maximum when cost is minimum. In the course of this research work primary data are collected using questionnaires, interview and observation. Oral interview were used to substantiate and elucidate the validity and objectivity of the information supplied in the questionnaire by the respondents. The data were presented in tables and simple percentage to show degree of responses and chi-square were used to test the hypotheses. The major problem findings of the study are Lack of experienced personnel who has the basic knowledge of working capital management. Wrong application management of working capital (i.e holding of idle cash in the office for no just course). Hence profit is said to be maximum when cost is minimum. The researcher therefore recommended that: All the components of working capital of the enterprise should be effectively managed. Idle cash must be held in the office for no just cause. Effective cost management leads to profit maximization and cost reduction is best achieved when the working capital components of the enterprise are effectively managed. It is anticipated that the identification of the major problems and implementation of the recommendation here will ensure effective management of working capital of an enterprise that will no doubt guarantee and improve the achievement of the enterprise's objective.