European Journal of Accounting, Auditing and Finance Research (EJAAFR)

EA Journals

Effect of Cash Conversion Cycle and Inventory Holding Period on the Profitability of Small and Medium Enterprises in Wote, Makueni County

Abstract

This study examined influence of working capital management practices on the profitability of small and medium sized enterprises in Makueni County. A cross-sectional survey research design was used. A sample of 50 small and medium sized enterprises from Wote town was used. The financial statements for 2012-2016 were used to generate secondary data while semi-structured questionnaires were used for primary data collection. Descriptive statistics of frequency, means and standard deviation were used while the results were presented in tables. The study aimed at finding out the relationship between profits of the small and medium enterprises and inventory turnover, receivables, cash management and payables. The findings indicated that there exist a positive but not significant relationship between cash conversion cycle and profitability, while inventory-holding period has a positive and significant effect on profitability. The study recommends an improvement on the cash conversion cycle and use of the findings for developing policies for improvement since small and medium enterprises are key contributors to the Gross Domestic Product of the country.

Keywords: Cash conversion cycle, Small and Medium Enterprises, Working Capital Management

cc logo

This work by European American Journals is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 4.0 Unported License

 

Recent Publications

Email ID: editor.ejaafr@ea-journals.org
Impact Factor: 7.77
Print ISSN: 2053-4086
Online ISSN: 2053-4094
DOI: https://doi.org/10.37745/ejaafr.2013

Author Guidelines
Submit Papers
Review Status

 

Scroll to Top

Don't miss any Call For Paper update from EA Journals

Fill up the form below and get notified everytime we call for new submissions for our journals.