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@article{199878,
        author = {Ebirahim Misganaw Muhiye and Dagnachew Tamene Ano and Seid Kassaw Yesuf},
        title = {AN IMPACT OF WORKING CAPITAL MANAGEMENT ON PROFITABILITY OF SUGAR MANUFACTURING FACTORIES IN ETHIOPIA (A STUDY ON SELECTED SUGAR FACTORIES)},
        journal = {International Journal of Innovative Research in Technology},
        year = {2026},
        volume = {12},
        number = {12},
        pages = {282-304},
        issn = {2349-6002},
        url = {https://ijirt.org/article?manuscript=199878},
        abstract = {Working capital plays a vital role in the company’s operations and requires the efficient management and it concerns the management of cash, inventories, accounts receivable, and accounts payable. It is necessary for a company to monitor its working capital properly and maintain its balance at the appropriate level. The purpose of the study was to examine the impact of working capital management on profitability of sugar manufacturing factories in Ethiopia. The study used secondary data collected from 4 (four) sugar manufacturing companies covering the period from 2013-2017. The study used explanatory research design also adopted quantitative method of research approaches to test research hypothesis. The dependent variables used in the study was Return on asset (ROA) and while the independent variables were Cash conversion period (CCP), Account receivable period (ARP), Account payable period (APP), and Inventory conversion period (ICP) for measurements of working capital management, also the control variables used in the study were Current ratio (CR) as a measure of liquidity, Debit ratio (DR) for a measure of firm leverage, Firm size (FS) measured by natural logarithm of sales and Firm growth rate (FGR) which is measured by changing in annual sales value with reference to previous year’s sales. The data were run using SPSS (version 20) and STATA (version 12) then analysis was made through descriptive statistics, Pearson correlation, and OLS regression. Using panel data, the study found that account payable period has a significant negative impact on profitability while account receivable period has a significant positive impact on profitability. More over the study found that there is significant negative impact of size on firm profitability. Furthermore, the study found that Cash conversion period, Inventory conversion period, Firm growth rate have insignificance positive impact on company’s profitability. Furthermore, insignificance negative impact of Debt ratio and current ratio on profitability was found. Based on the key findings from the study it has been suggested that the management of a firm can increase profitability by increasing the number of day’s accounts receivable by implementing applicable collection policy for the sector and decreasing account payable period from this action the firm can benefit from discount and will have a worthy relation with the suppliers for future transaction.},
        keywords = {working capital, sugar factory, management, profitability},
        month = {May},
        }