Working Capital Management as a Panacea for a Successful Business Operation (a Case Study of Golden Guinea Breweries PLC, Umuahia, Abia State)

Abstract

This research work on working capital management as a panacea tor a successful business operation. a case study of Golden Guinea Breweries, PLc. was tailored to explore the efficiency of GGB Plc working capital management and its relationship with profitability. otherwise its success and would be used as the parameter to measure the operations of other manufacturing companies in the same industry. The work was organized into five sections or chapters. It commenced with the introduction, review of related literature. method of data collection. and finally the discussion of findings. recommendations. conclusions and suggestion for further studies. Working capital is the amount by which total current assets exceed IOta I current liahilities. It is a very important measure of the liquidity of a company as current liabilities are obligations to be paid within one year and current assets are assets to be realized in cash within one year too. The constituent parts that usually make up the working capital figure, are the items of current assets and current liahilities. The items are stocks of work-in-progress. raw materials. and finished goods. prepayments. receivable. Bank and cash balances and all current liahilities. owever. working capita l management IS the regulation. adjustment and control of the balances of these items of current assets and current liabilities of a firm. In course of the study. the researcher made effective use of interviews. questionnaire and text books, Newspapers. Accounting journals. Golden Guinea Newsletters. Golden Guinea Annual Reports and Classroom monographs in obtaining reliable and valid data. From data analyses. it was observed that the working capital management of Golden Guinea Breweries Plc. is efficient and that it influences the success of the company' That is. it enhances its profitability. It revealed that a correlation exits between efficient working capital management and success (profitability) and it was tested with a regression analysis. The company 111 its bid to maintain an efficient working capital management and level. Ensures that it has a relative sound cash management. inventory management. use of trained and qualified staff with enough working experience and working capital management ideas . The liquidity position of the company is nice as statistically tested. although it declined over the years. It operates cash budgets and wisely reinvests its excess cash on short term investment opportunities increase its profits and for the settlement of its ob ligations. However. the company encounters some problems which among others include poor budget monitoring, poor credit policy and monitoring / low sale levels. high maintenance costs. high interests rates. Hard economics situation and deliberate over riding of the company's internal control system which all directly and indirectly affect the company's working capital management and profitability. Despite. the above problems, the company acknowledges that fact that to be successful. its working capital has to be prudently managed.