The effect of working capital management on the performance of commercial banks in Ghana
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Date
2021
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KNUST
Abstract
The study examined the effect of working capital management on the performance of commercial banks in Ghana with CAL Bank as a case study. The objectives of the study sought to examine the effect of working capital on the performance of the bank, the effect of accounts payable management on performance of the bank and the impact of operating cash flow on the profitability of the bank. The explanatory research design was adopted for the study. Convenience and purposive sampling technique were adopted in selecting three (3) local banks for the study. The three local banks were Agricultural Development Bank, Ghana Commercial Bank and Cal Bank. The study used a ten (10) year secondary data extracted from the audited end of year financial reports of the three (3) local banks spanning the period 2009 – 2019. Descriptive statistics, pearson correlation and panel data regression were adopted in analyzing the data. The results of the study indicated the independent variables of the study did not have a significant influence on the performance of the bank except net interest income and acid test ratio. Account payable management had a negative but insignificant influence on the performance of the bank. The results of the study demonstrated that cash flow from operating and investing activities had a negative effect on the banks profitability while financing cash flow had a positive effect. The study recommends that bank management take the necessary measures to use its idle cash and banking balances to meet its short-term liabilities and operating costs.
Description
A thesis submitted to the department of accounting and finance college of humanities and social science in partial fulfillment for the award of master of science in accounting and finance