The effectiveness of working capital management and performance of private agri-business firms

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Date
2023
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KNUST
Abstract
The aim of this study was to assess the operational efficiency of private agribusinesses in Ghana by examining their management of working capital and financial performance. The study utilised quantitative approaches and performed inferential analysis. The study utilised a cross-sectional, descriptive research methodology. The study focused on persons who held ownership or top executive roles inside private agri-businesses in Ghana, constituting the target group. The research employed purposive sampling to choose a sample of 154 participants who have specialised knowledge in the effectiveness of working capital management and the performance of private agri-business enterprises. The study hypotheses were assessed using SPSS version 26. Descriptive statistics were utilised to present a thorough overview of the data. The hypotheses of the probe were evaluated using regression analysis. According to the findings, private agri-businesses in Ghana mostly use inventory management and account payable management as their principal working capital management procedures, while account receivable management is less popular. The study's findings suggest that efficient inventory management significantly and positively impacts the financial performance of private agri-business businesses in Ghana. Nevertheless, it was noted that the effects on financial performance were not comparable for accounts receivable and payable. The study concluded that the market environment, financial situation, and supplier connection were not deemed major determinants of the effectiveness of working capital management in private agri-business businesses in Ghana. Nevertheless, it was noted that the most significant and widespread factors affecting the efficiency of working capital management in these organisations were management assistance and technology. Senior executives should actively participate in financial decision-making and allocate sufficient resources and support to initiatives aimed at improving working capital efficiency.
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A thesis submitted to the institute of Distance Learning, Department of Accounting and Finance, School of Business, College of Humanities and Social sciences, KNUST in patial fulfilment of the requirements for the degree of master of science in accounting and finance
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