ABSTRACT

Working capital management refers to all aspects of administration of both current assets and current liabilities use for the running of the day to day activities of a business. Working capital management which is taken to be the driving force of a financial manager is an integral part of the overall corporate management. The basic problems therefore is that there is a loss of goodwill as at when due, holding of stock in term of raw material and finished goods which lead to the accumulation of cost such as warehouse cost, capital tie down cost, deterioration and obsolescence cost. The objective of research work is to evaluate and assess the impact of working capital management on corporate performance of a company. To determine whether effectiveness of working capital management will lead to improvement in planning, budgeting and control of liquidity, profitability and cost reduction in a manufacturing company. To carry out the research study, a research question were formulated in line with objectives of the study and was administered to staff of the selected companies. The data obtained were analyzed using tables and simple percentages, chi-square (X2) statistical tools was used in the hypothesis testing stated in chapter one of this study. Based on the result of hypotheses tested the finding are that company mostly focuses on liquidity management. Planning, budgeting and control of working capital are necessary for effective management of the liquidity of a large manufacturing company. The recommendation includes that the financial manager must determine levels and composition of current asset. That the financial manager must see that the right sources are tapped to finance current asset and that current liabilities are paid in time. The company should adopt a more aggressive debt management policy to ensure that unnecessary fund are not tied up in debtors.