Relevance Of Working Capital Management On The Profitability Of A Management Company (A Study Of Karlander Nigeria Limited)

ABSTRACT

The project examine the relevance of working capital management on the profitability of a ship management company. The broad objective of this study is to x-ray the effective management of working capital of ship management service companies. The data collected were primary and secondary the administration of a well-structured questionnaire, on the other hand, the secondary sources used for the purpose of this research include: already written and conduced work of others on the topic, these were sourced from various places such as information from prominent authorities in the field concerned. The data generated for this study was analyzed with descriptive statistics, ratio analysis and regression analysis. The hypothesis that effective management of working capital does not significantly affect the profitability of the company. Effective management of working capital had been validated by the findings from this study. It has also been found that management of working capital is of particular importance to small firms like Karlander Nigeria Limited. While a small firm can reduce its investment in fixed assets by renting, hiring or leasing plants and equipment, there is no way it can investment in cash, receivables and inventories. It therefore follows that greater emphasis should be placed on prudent management of working capital. The recommendations apply both to Karlander Nigeria Limited, as the case study in particular and also for general application in the shipping services world. Based on the company goals and objectives, there must be a company policy on the management of various components of working capital.