TABLE OF CONTENT
DECLARATION
APPROVAL ii
DEDICATION iii
ACKNOWLEDGEMENT iv
TABLE OF CONTENT v
LIST OF ABBREVIATIONS ix
ABSTRACT X
CHAPTER ONE 1
GENERAL INTRODUCTION 1
1 .0 Introduction
1.1 Back ground of the study 1
1.2 Statement of the problem 3
1 .3 Objectives of the study 5
1.3.1 General objective 5
1.4 Research questions 5
1 .5 Scope of the Study 5
1.5.1 Content scope 5
1 .5.2 Geographical Scope 6
1 .5.3 Time Scope 6
1.6 Significance of the Study 6
1.7 Justification 7
1.8 Definitions of key terms 7
1.9 Fig. 1.1: Conceptual frame work 8
CHAPTER TWO 10
LITERATURE REVIEW 10
2.0 Introduction 10
V
2.1 Theoretical review .10
2.1.1 Baumol Model by Baumol (1952) 10
2.1.2 Keynesian Theory of Money by Keynes (1956) 11
2.2 Review of main concepts of the study 12
2.2.1 Working Capital Management 12
2.2.2 Organizational Profitability 13
2.3 Empirical literature review 14
2.3.1 Effect of inventory management on Organizational profitability 14
2.3.2 Effect of accounts receivables management on Organizational profitability 18
2.3.3 Effect of accounts payables management on Organizational profitability 22
2.4 Conclusion 24
METHODOLOGY 25
3.0 Introduction 25
3.1 Research Design 25
3.2 Area of the study 25
3.3 Study population 26
3.4 Sampling procedures 26
3.4.1 Sample size and Selection 26
3.4.2 Sampling techniques 27
3.5 Data Collection Methods and Instruments 27
3.5.1 Data Collection Methods 28
3.5.3 Data collection instruments 29
3.6 Validity and Reliability of Instruments 29
3.6.1 Validity 29
3.6.2 Reliability of the Instrument 30
3.7 Analysis of Data 30
3.7.1 Quantitative Data analysis 30
3.7.2 Qualitative Data analysis 31
3.8 Ethical Considerations 31
3.9 Limitations of the Study 32
CHAPTER FOUR 33
vi
DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF THE RESEARCH
FINDINGS 33
4.0 Introduction 33
4.1 Descriptive analysis RATHER call it Background information 33
4.2 Inventory management and profitability at Uganda Baati 36
4.3 Accounts receivable management and profitability of manufacturing companies 39
4.3 Accounts payable management and profitability of manufacturing companies 42
4.4 Profitability in Uganda Baati Limited 44
CHAPTER FIVE 47
SUMMARY OF THE FINDINGS, CONCLUSIONS, RECOMMENDATIONS AND
AREA OF FURTHER STUDIES 47
5.0 Introduction 47
5.lSummary of the findings 47
5.1.1 Effect of inventory management on profitability in manufacturing industries9 47
5.1.2 Effect of account receivables management on profitability in manufacturing industries? ..48
5.1.3 Effect of accounts payables management on profitability in manufacturing industries9 49
5.1.4 Profitability performance of Uganda Baati limited 50
5.2.2What is the effect of account receivables management on profitability in manufacturing
industries9 51
5.2.3 What is the effect of accounts payables management on profitability in manufacturing
industries9 51
5.2.4 Profitability performance of Uganda Baati limited 51
5.3 Recommendations 52
5.3.lWhat is the effect of inventory management on profitability in manufacturing industries? .52
5.3.2 What is the effect of account receivables management on profitability in manufacturing
industries9 52
5.3.3 What is the effect of accounts payables management on profitability in manufacturing
industries9 52
5.4 Areas of further study 52
REFERENCES
APPENDICES 57
ABSTRACT The study was to examine the effect of working capital management on organizational profitability in Uganda Baati limited, Tororo branch. The objectives of the study were; to examine the effect of inventory management on profitability in Uganda Baati limited, Tororo branch, to establish effect of accounts receivables management on profitability in Uganda Baati limited, Tororo branch and to establish the effect of accounts payables management on profitability in Uganda Baati limited, Tororo branch. The study used a case study design in collecting data from the field. A sample of 52 respondents was involved in the study. The study employed both questionnaire and interview guide as research instruments in collecting data from the field. Findings of the study indicated that; there is a strong positive correlation between inventory management and profitability of Uganda Baati limited with (R=O.813) that gives evidence that there is a significant strong positive correlation between inventory management in terms of inventory budgeting and profitability of manufacturing companies in terms of increase in the size of equity of the firm; there is a significant relationship between accounts receivable management and profitability of manufacturing companies with (R0.725) which implies that there is a strong positive correlation between accounts receivable management and profitability of manufacturing firms; there is a significant relationship between accounts payables management and profitability of Uganda Baati limited with (R ~O.55O) which implies that there is a moderate positive correlation between having payable policies in the organization and increase in the size of equity of the firm. The study recommendations were; Management of inventory is vital, thus Uganda Baati limited should ensure that they obtain the right supplier as this will help enhance on inventory management and ensure that there is stock of right inventory in the right time when required. Also the management of Uganda Baati limited has to handle its debtors with utmost care with specific guidelines and policies. This might reduce on the number of debtors that the business handles and hence improving on equity in the enterprise. Furthermore, the Uganda Baati limited should obtain credit at low interest rates, credit will help to finance operations and hence increase on the output of the industry.
