Influence of Cash Conversion Cycle on Government Agency Profitability: A Case of Tanzania Electricity Supply Company – Dar es Salaam

Abstract

This study sought to examine the influence of the cash conversion cycle on government agency profitability, A Case of Tanzania Electricity Supply Company – Dar es Salaam. In this study, the Trade-off theory was employed. A descriptive research design was utilized, and a quantitative approach was employed. The research was accomplished by considering a population of 420 staff members from the TANESCO – Dar es Salaam Region Offices as the participants, selected using a simple random sampling technique. For the collection of primary data, a questionnaire was employed as the primary data collection tool, and secondary data was collected through document review. The collected data underwent rigorous analysis using a combination of descriptive and inferential statistics with the support of the SPSS version 26. Findings revealed that the length of the cash conversion cycle, a well-optimized cash conversion cycle, timely management of cash flow, and working capital significantly affect the profitability of the organization. The study recommends that TANESCO should optimize working capital management to boost cash flow and profitability. Future research can explore technological solutions and advanced financial software for further improvement.