ABSTRACT

The study investigated the effect ofworking capital management on business PZ Cusson PLCfor the period 2007-2018 with specific objectives namely, The research formulated four specific objectives; determine the effect ofaverage collection period on return on assets ofPZ Cusson PLC; to examine the influence of inventory turnover in days on return on equity ofPZ Cusson PLC; to evaluate the effect ofaverage payment period on the return on investment ofPZ Cusson PLC and to assess the effect ofcash conversion cycle on the return on sales ofPZ Cusson PLC. Thus, research questions and research hypotheses were structured in accordance with the specific objectives. In a bid to achieve a meaningful research study work, this research will review related literatures on the effect ofworking capital management on business PZ Cusson PLC which were sub-divided into three subheadings such conceptual framework, theoretical framework and empirical review. However, in the quest to perfect this research; ex-facto design was adopted were data was sourced secondarily through the annual reports ofPZ Cusson PLC jrom 2007 — 2018. Thus, average collection period, return on assets, inventory turnover, return on equity, average payment period, return on investment, cash conversion cycle and return on sales as the proxies used in the analysis. The analysis however made thefollowingfindings; that average collection period has a significant effect on the return on assets ofPZ Cusson PLC, that inventory turnover in days do influence return on equity ofPZ Cusson PLC, that there is a significant effect ofaverage paymentperiod on return on investment ofPZ Cusson and that there is a significant effect ofcash conversion cycle on return on sales ofPZ Cusson PLC. Sequel to the findings and conclusion, the research made the following recommendations that Manufacturing companies should pay attention to sound management oftheir working capital management components since the results show that they do affect profitability, although to a lesser significance, that PZ Cusson management to understand the relationship that exists between various working capital components andprofitability and the direction that they affect theprofitfor effective management ofthe working capital, that the managers ofPZCusson should enhance performance by reducing the number ofdays in inventories, cash conversion cycle and net trading cycle to a reasonable minimum. This can be accomplished by improving the inventory control process and that the managers ofPZ Cusson should maintain a more restrictive credit policy as well as goodscorporate governance be entrenched in their overall operations. Accounts receivable should be collected more quickly by improving the efficiency ofthe collection process as debt should be collected in line with the agreed credit terms