TITLE:
Empirical Study on the Impact of Account Receivables and Inventory Conversion Cycle on Profitability of Manufacturing Firms Listed on Ghana Stock Exchange
AUTHORS:
Lamptey Lanquaye Lazarus, Acheampong Agyei Kwame, Zuzie Suglo Rakibu, Sunu Prince, Muda Paul
KEYWORDS:
Account Receivables Period, Inventory Conversion Period, Ghana, Return on Asset, Working Capital Management
JOURNAL NAME:
Open Journal of Business and Management,
Vol.11 No.3,
May
31,
2023
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.