Effect of Cash Conversion Cycle on Profitability in Mtn and Globacom

TABLE OF CONTENT
Title page Certification
i Dedication
ii Acknowledgement
iii Abstract
iv

Chapter One:

1.0 Introduction
11.1 Background Information
11.2 Problem Statement
61.3 Research Objectives
71.4 Hypothesis
81.5 Significance of the Study
91.6 Scope of the Study
10
Chapter Two:

2.0 Literature Review
Chapter Three: 3.0 Research Methodology
303.1 Description of the Study Area
303.2 Research Design
303.3 Method of Data Collection
13.4 Data Limitation
313.5 Method of Data Analysis
323.5.1 Summative Approaches
323.5.2 Simple Percentage
33

3.5.3 Incremental Averages 34

3.6 Test of Hypothesis 34
Chapter Four4.0 Presentation of Data, Analysis of Data and Discussion of Findings 364.1 Data Presentation 374.2 Data Analysis 394.3 Discussion of Findings 414.4 Test of Hypothesis 45

Chapter Five:

5.0 Summary of Findings Conclusion andRecommendation 475.1 Summary of Findings 475.2 Conclusion 48
5.3 Recommendation 48

References

Introduction

Working capital management is a very important component of corporate finance because it directly affects the liquidity and profitability of the company. The working capital is known as life giving force for any economic unit and its management is considered among the most important function of corporate management. Due to that, every organization whether, profit oriented or not, irrespective of size and nature of business, requires necessary amount of working of working capital (Achchuthan & Kajananthan, 2013). Working capital management is a simple and straight forward mechanism of ensuring the ability of the firm to fund the difference between the short term assets and short term liabilities (Kajananthan & Achchuthan, 2013). It deals with current assets and current liabilities. There are two basic ways to assess the working capital management of firms.

They are balance sheet concept and studying current assets and current liabilities Concept of Cash Conversion Cycle (CCC). The Cash Conversion cycle measures the number of days between actual cash expenditures on purchase of raw materials and actual cash receipts from the sale of products or services (Eljelly, 2004). Since every corporate organization is extremely concerned about how to sustain and improve profitability, hence they have to keep an eye on the factors affecting the profitability. In this regard, liquidity management having its implications on risks and returns of the corporate organizations cannot be overlooked by these organizations and hence cash conversion cycle being indicator of the liquidity management needs to be explored as to how it may affect the profitability of the corporate units. Today due to changing world’s economy, advancement of technology and increased global competition among the companies, every company is striving to enhance their profits and for that companies are putting every effort to bring their cash conversion cycle at optimum level to increase profitability.

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