Effect of Cash Conversion Cycle on Profitability in Mtn and Globacom

Effect of Cash Conversion Cycle on Profitability in Mtn and Globacom


Cash Conversion Cycle

TABLE OF CONTENT
Title page
Certification                                                                                                i 
Dedication                                                                                        ii
Acknowledgement                                                                            iii
Abstract                                                                                           iv
Chapter One: 
1.0        Introduction                                                                        1
1.1        Background Information                                                     1
1.2        Problem Statement                                                              6
1.3         Research Objectives                                                             7
1.4       Hypothesis                                                                          8
1.5        Significance of the Study                                                     9
1.6        Scope of the Study                                                             10
Chapter Two: 
2.0        Literature Review

Chapter Three: 
3.0     Research Methodology                                         30
3.1     Description of the Study Area                             30
3.2    Research Design                                                            30
3.3  Method of Data Collection                                            31
3.4  Data Limitation                                                             31
3.5  Method of Data Analysis                                               32
3.5.1                   Summative Approaches                                       32
3.5.2         Simple Percentage                                                33
3.5.3         Incremental Averages                                           34

3.6            Test of Hypothesis                                               34
Chapter Four
4.0 Presentation of Data, Analysis of Data and Discussion of Findings                                              36
4.1  Data Presentation                                                          37
4.2  Data Analysis                                                                39
4.3  Discussion of Findings                                         41
4.4   Test of Hypothesis                                                         45
Chapter Five: 
5.0  Summary    of      Findings Conclusion and
Recommendation                                              47
5.1  Summary of Findings                                                     47
5.2  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.