ABSTRACT
Large inventory also reduces the
risk of a stock-out. Trade credit may stimulate sales because it allows a firm
to access product quality before paying (Raheman
and Nasr, 2007). Another component of working capital is accounts payables,
Raheman and Nasr (2007) indicated that delaying payment of accounts payable to
suppliers allows firms to access the quality of obtaining products and can be
inexpensive and flexible source of financing. On the other hand, delaying of
such payables can be expensive if a firm is offered a discount for the early
payment. By the same token, uncollected accounts receivables can lead to cash
inflow problems for the firm. A popular measure of working capital management
is the cash conversion cycle, that is, the time span between the expenditure
for the purchases of raw materials and the collection of sales of finished
goods. Deloof (2003) found that the longer the time lags, the larger the
investment in working capital, and also a long cash conversion cycle might
increase profitability because it leads to higher sales. However, corporate
profitability might decrease with the cash conversion cycle, if the costs of
higher investment in working capital rise faster than the benefits of holding
more inventories or granting more trade credit to customers. And the main cause
of the failure of a business enterprise has been found to be the shortage of
working capital, their mishandling, and mismanagement of working capital and
underutilization of capacity (Vataliya, 2009). In general, working capital
management is not only improving financial performance in today's cash-strapped
and uncertain economy, but it is the question of meeting firm's day to day
operation. Therefore, it is a significant issue to know and understand the
impacts of working capital management and its influence on firms' performance.
Also, several research works have identified the impact of working capital
management on the performance of organizations.
MICHAEL, U (2021). Effect Of Corporate Social Responsibility On Firms Performance: A Case Study Of Access Bank Plc. Mouau.afribary.org: Retrieved Nov 27, 2024, from https://repository.mouau.edu.ng/work/view/effect-of-corporate-social-responsibility-on-firms-performance-a-case-study-of-access-bank-plc-7-2
UNIVERSITY, MICHAEL. "Effect Of Corporate Social Responsibility On Firms Performance: A Case Study Of Access Bank Plc" Mouau.afribary.org. Mouau.afribary.org, 22 Jul. 2021, https://repository.mouau.edu.ng/work/view/effect-of-corporate-social-responsibility-on-firms-performance-a-case-study-of-access-bank-plc-7-2. Accessed 27 Nov. 2024.
UNIVERSITY, MICHAEL. "Effect Of Corporate Social Responsibility On Firms Performance: A Case Study Of Access Bank Plc". Mouau.afribary.org, Mouau.afribary.org, 22 Jul. 2021. Web. 27 Nov. 2024. < https://repository.mouau.edu.ng/work/view/effect-of-corporate-social-responsibility-on-firms-performance-a-case-study-of-access-bank-plc-7-2 >.
UNIVERSITY, MICHAEL. "Effect Of Corporate Social Responsibility On Firms Performance: A Case Study Of Access Bank Plc" Mouau.afribary.org (2021). Accessed 27 Nov. 2024. https://repository.mouau.edu.ng/work/view/effect-of-corporate-social-responsibility-on-firms-performance-a-case-study-of-access-bank-plc-7-2