Empirical Study on the Impact of Account Receivables and Inventory Conversion Cycle on Profitability of Manufacturing Firms Listed on Ghana Stock Exchange ()
ABSTRACT
The
purpose is to investigate the effect of account receivables and inventory
conversion cycle on performance of Manufacturing Firms Listed on Ghana Stock
Exchange. The paper adopted cross-sectional study which adopts quantitative
research approach. A panel data of six (6) listed Ghanaian manufacturing firms
on the Ghana Stock exchange for the periods 2011 to 2020 was used for the
study. Data was obtained from the audited financial statements of the firms.
Correlation and Ordinary Least Square (OLS) multiple regressions were employed to analyse the data. The finding revealed that there is statistically negative
(Beta = -0.201) and significant (P-value = 0.000) effect of account
receivables period on return on assets. The study revealed that there is
statistically significant negative effect between inventory conversion period
and return on asset (Beta = -0.273, P < 0.05). The results indicated that (current ratio, sales
growth and cash to sales) had no significant positive effect (Beta = 0.115, P > 0.05), (Beta = 0.071, P > 0.05) on return on asset.
Share and Cite:
Lazarus, L. , Kwame, A. , Rakibu, Z. , Prince, S. and Paul, M. (2023) Empirical Study on the Impact of Account Receivables and Inventory Conversion Cycle on Profitability of Manufacturing Firms Listed on Ghana Stock Exchange.
Open Journal of Business and Management,
11, 1324-1339. doi:
10.4236/ojbm.2023.113073.
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