Effective Management of working capital is the life blood of every business: An assessment of working capital management practices within Ghana Water Company Limited

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Date
2012
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Abstract
This study examines the working capital management practices within the Ghana Water Company Limited and its impact on the organization’s financial position. Liquidity and profitability are two vital aspects of corporate business life and as such working capital has been described as the life blood which flows through the veins and arteries of the entire Organization. Working capital management has thus, become a basic and broad aspect of assessing the performance of a corporate entity. It engages every part of the structure and it gives courage and morale to the management and personnel. The survey was conducted in the Central Regional Offices of the company. In all six (6) top officials were interviewed for the study. The sample was selected by the purposive sampling technique and data were collected using a structured questionnaire. The data collected was analyzed using frequencies and percentages with the use of excel software. The study revealed that the company offers its services on credit to its customers and it takes five weeks after product consumption before customers are expected to make payments. Then nine weeks before any action is taken against recalcitrant customers, by that time the real value of the debt would have been depreciated because of the nature of inflation in the country. The study realized that the separation of the Revenue and Accounting Department helped in improving revenue management as each department served as a check and balance mechanism for the other with the Internal Audit Departments playing only a supervisory and investigative roles when major discrepancies occurred. The study also revealed that management of the company believes in the effective management of working capital and will cautiously puts in place policies and practices that attempt to increase cash inflow and the overall profitability of the firm.
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A Thesis submitted to the Department of Institute of Distance Learning, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirement for the degree of Commonwealth Executive Masters in Business Administration
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