Working capital management and its effect on banks profitability in nigeria
Project report on working capital management of hdfc bank pdf
Any decision made by the managers of the entity in this context can significantly affect return of the entity stock which shall transform company value and ultimately increase shareholders wealth Michalski, Pandey, I. If current ratio increases by 1 unit, return changes in net interest income lead to a decrease on asset decreases by 3. From the table, a unit increase in proit satisies the assumption of homoscedasticity and ater tax leads approximately to 2. Liquidity for the on-going firm is not reliant on the liquidation value of its assets, but rather on the operating cash flows generated by those assets Soenen, Hoque, A. Pandey posited that working capital has tal management WCM and management of work- two concepts, namely gross working capital and ing capital MWC can be used interchangeably. In this wise, other pol- return on equity by 1. Working capital is the stock stored that has a conversion or resale value in order to gain profit. Proitability of Belgian Firms? Padachi inancing. More indicators and proxies to measure working capital and bank performance need to be explored in order to broaden the horizon of other researchers, who may want to further study some aspects in working capital management. Current ratio tends to reduce return on as- a positive relationship between monetary policy set by 0. Retrieved Capital Management Afect
To ascertain the influence of average period of debt settlement on the company profitability 3. Similarly, ef- study is in disagreement with Afza and Nazir fective monetary policy enhances the proitabil-who argued that there was an inverse re- ity of banks by 2.
Inventories: Inventories are stocks of raw materials, works in-progress and finished goods of a company engaged in manufacturing operations.
Corporate Proitability. The study shall cover a period of 5 years from A firm can collect its receivables in a short time and restrict credit sales to reduce account receivables and increase cash inflows.
Working capital is highly imperative to maintaining the solvency, liquidity, survival, and proitability of a irm Hoque et al. Fixed Asset: Assets, which are not readily convertible into cash and are acquired for long term usage in the firm, e.
The company profitability is not significantly influenced by the average period of inventory retention.
Working capital management in banks pdf
Results and discussion mance, stating that listed deposit money banks in Nigeria should maintain a higher acid test ra- his section discusses the estimated results from tio to increase proitability. If prises. Management strategy aimed at maintaining a balance between liquidity and profitability has far reaching consequences on the growth and survival of the firm. Banks usual- due to lack of economic adjustments in an election ly liquidate term loans not by the selling collateral year and the foresee able future does not look ap- asset or goods of the borrower as in the case of the pealing for Venezuela. Sogorb-Mira, F. The specific objectives are: 1. The study shall cover a period of 5 years from It centers on current assets and current liabilities of a firm. Retrieved Econometric analysis 6th ed. Working capital: This is the capital or fund available for carrying on the day to day operations of an Organization. Fraud is almost in every organization and this is also a big problem to working capital managers since working capital management requires a substantial part of the capital held in liquid cash so as to run the day to day activities of a firm. It was also shown from the analysis that the return on asset ROA is a better measure of proitability as obtained from the Hausman test, and ixed panel efect is proven to be a better methodology compared to random panel efect. Loan Port Folio: A mixture of shares and bonds held by a firm. Eventually, the management of working capital WCM necessitates short term decisions in working capital WC and financing of all aspects of both firms short term assets and liabilities.
Working capital management is mostly important to firms in developing economics because they are faced with many problems such as; low investment, low sales, lack of resources, low level of product and process technology, small market, lack of access to capital, lack of physical infrastructure, production capacity to satisfy demand because they are smallthereby, making inventory management more crucial.
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