A 5 Years Systematic Overview of Working Capital Management towards Profitability of Alcholic and Non Alcholic Industries in Rwanda

Abstract

The topic of the study was to analyze working capital management on profitability of Consumer goods industries in Rwanda. The problem of the study was looking on how does working capital management could be a channel of profitability of consumer goods industries especially in Rwanda. The objectives of the study were to find out the extent to how inventory management affect the profitability of consumer goods industry, to evaluate the effectiveness of cash management on the profitability of consumer goods industry; and to analyze the influences of account receivable management on the profitability of consumer goods industries. The methodology used questionnaire, and documentary techniques, while methods of data analysis were descriptive statistic and linear regression analysis methods. Target population was 585 employees, while sample size was 59 of respondents from Bralirwa Plc, Skol industry and Urwibutso Enterprise as selected consumer goods industries in Rwanda. However, the findings of this study were presented in accordance with research objectives. Then, the results on the effects of Inventory management on the profitability of consumer goods industries were on the table 5 which confirmed in consumer goods industries, they make sure that every product needed to be sold on market is available in stock as confirmed on the rate of 93.2%, and also the store room is well maintained in order to keep well goods on rate of 93.2%. The findings on the effectiveness of cash management on the Profitability of Consumer goods industries were on table 6 which shown that petty cash is always available for solving little payments as confirmed by 96.6% of respondents. Cash are always disbursed after being approved by official workers was confirmed by 93.2% of respondents. The results on the influences of account receivable management on the profitability of Consumer goods industries were shown on table 7 that illustrated debts were only given after assessing the capacity of the purchaser to repay the debt as confirmed by 88.1% of respondents from selected consumer goods industries. The linear regression test between working capital management and profitability of Consumer goods industries confirmed that there is positive relationship between profitability and inventory management; cash management; and account receivable. As to recommend, the consumer goods industries in Rwanda should ensure that their personnel maintain a certain level of competence to perform duties effectively.