WORKING CAPITAL MANAGEMENT AND PROFITABILITY OF SMALL AND MEDIUM SCALE ENTERPRISES (SMES) IN RIVERS STATE
TONY-OBIOSA, Ruth Lessi
Department of Accountancy, Faculty of Management Sciences,
Rivers State University, Port Harcourt Rivers State, Nigeria.
and
IBAMA, Kellyiyi Chika Kelly
Department of Accountancy, Faculty of Management Sciences,
Rivers State University, Port Harcourt Rivers State, Nigeria.
ABSTRACT
This study empirically investigated the relationship between working capital management and profitability of small and medium scale enterprises (SMEs) in Rivers State. The study made use of primary data of which 100 copies of the structured questionnaire were used in collecting the relevant data. However, the study analyzed data from seventy-eight copies of the questionnaire retrieved and deemed usable. The study made use of descriptive statistics such as tables, frequencies, simple percentages and mean scores to analyze the personal data of the respondents and to answer the research questions while regression analysis was used to test the hypotheses formulated at 5% level of significance. The data analysis was facilitated by Statistical Package for Social Sciences (SPSS) version 2.1. Findings emanating from the study showed that: there is a positive and significant relationship between the measures of working capital management (Account Payable and Profitability and Cash Conversion Cycle) and profitability with regards to Earnings per Share and Return on Investment of small and medium scale enterprises (SMEs) in Rivers State. The study concluded that working capital management significantly improves profitability of small and medium scale enterprises (SMEs) in Rivers State.