Working Captial Management And Organizational Performance

Abstract

The study x-rays the effect of working capital management on organizational performance. The independent variable (working capital management) was measured with inventory, receivable and payable, while the dependent variable (performance) was measured with net asset. The data was analyzed with multiple regression (ordinary least square) and the t-statistics was used to test the significance level of the relationship between the dependent and independent variable. The result shows that there is a significant relationship between inventory and net asset with a t-statistical value of 4.374 and a probability of 0.003 which is less than the pre-set significant level of 0.05. The result also shows that there is a significant relationship between trade receivable and net asset of Dangote Cement Plc with t-statistical value of 1.166 and a probability of 0.285 which is more than 0.05. For the effect of payable on net asset, the result shows that t-statistical value is 0.799 with a probability of less than 5%. In cases of hypothesis I and III, we accept the alternative hypothesis and reject the null hypothesis. In hypothesis II, we accepted the null hypothesis. In conclusion, working capital management have effect on net asset. It was recommended that to ensure availability of material, adequate provision of supplies should be made to forestall production stoppages; a level of trade receivable should be maintain and a strict terms of trade should be put in place.