M. Tech. Business Administration / Working capital management is an extremely important area of financial management as current assets normally represent more than half of the total assets of a business. Literature has shown that efficient management of working capital will lead to more profitability and creating more market value. This study sought to ascertain the impact of the working capital management on firm profitability in the retail sector of the South African Johannesburg Stock Exchange listed companies.

Thesis (MDF)--Stellenbosch University, 2014. / ENGLISH ABSTRACT: The earnings of small and medium enterprises (SMEs) depend entirely on their reinvestment rate of capital. A quicker reinvestment rate of capital would not be possible when debtor’s collection period and stockholding period is slow, nor will it be possible with a shorter creditor’s payment period. Therefore, working capital management is fundamental when it comes to the overall performance of small and medium enterprises. As a result, this study examines the impact of working capital management on the profitability of small and medium enterprises in South Africa. Working capital management has a direct relationship with profitability. The data selected in this study consists of all firms listed on AltX, which is a division of the Johannesburg Stock Exchange, for the period 2000 to 2013. Descriptive statistics and regression analysis were used to evaluate the data collected and the results concurred with the relationship found between working capital management and profitability. Specific variables such as the cash conversion cycle, debtors’ collection period, stockholding period and creditor’s payment period are all associated with the profitability of firms. The dependent variable is return on assets and is the measure of profitability in this study. Furthermore, the results of this study may provide significant insight for financial analysts, shareholders, creditors and managers.

This research examines the impact of purchasing constraints and demand variability on working capital balances. The working capital accounts considered are creditors, debtors and raw material inventories. Purchasing constraints and demand uncertainty are defined. The supply chain of the South African cable industry, and one manufacturer in particular, and the challenges faced in the cable manufacturing process are discussed. To quantify the influences, a comparison between working capital accounts in the case of economic order quantity and actual purchasing practices is performed. A simulation model is developed to reproduce a larger sample of demand data, matching the cumulative probability density function of each cable type contained in the annual sales budget. The results show, that the working capital accounts react differently to changes in purchasing conditions and variations in demand, the most sensitive being raw material inventories. The study quantifies the influence of purchasing constraints on each working capital value. / Business Management / M.Com. (Business Management)

This study investigates the association between traditional and alternative working capital measures and the returns of industrial firms listed on the Johannesburg Stock E"change. Twenty five variables for all industrial firms listed for the most recent 10 years were derived from standardised annual balance sheet data of the University of Pretoria's Bureau of Financial Analysis. Traditional liquidity ratios measuring working capital position, activity and leverage, and alternative liquidity measures, were calculated for each of the 135 participating firms for the 1 0 years. These working capital measures were tested for association with five return measures for every firm over the same period. This was done by means of a chi-square test for association, followed by stepwise multiple regression undertaken to quantify the underlying structural relationships between the return measures and the working capital measures. The results of the tests indicated that the traditional working capital leverage measures, in particular, total current liabilities divided by funds flow, and to a lesser e"tent, long-term loan capital divided by net working capital, displayed the greatest associations, and e"plained the majority of the variance in the return measures. At-test, undertaken to analyse the size effect on the working capital measures employed by the participating firms, compared firms according to total assets. The results revealed significant differences between the means of the top quartile of firms and the bottom quartile, for eight of the 13 working capital measures included in the study. A nonparametric test was applied to evaluate the sector effect on the working capital measures employed by the participating firms. The rank scores indicated significant differences in the means across the sectors for si" of the 13 working capital measures. A decrease in the working capital leverage measures of current liabilities divided by funds flow, and long-term loan capital divided by net working capital, should signal an increase in returns, and vice versa. It is recommended that financial managers consider these findings when forecasting firm returns. / Business Management / D. Com. (Business Management)

This research examines the impact of purchasing constraints and demand variability on working capital balances. The working capital accounts considered are creditors, debtors and raw material inventories. Purchasing constraints and demand uncertainty are defined. The supply chain of the South African cable industry, and one manufacturer in particular, and the challenges faced in the cable manufacturing process are discussed. To quantify the influences, a comparison between working capital accounts in the case of economic order quantity and actual purchasing practices is performed. A simulation model is developed to reproduce a larger sample of demand data, matching the cumulative probability density function of each cable type contained in the annual sales budget. The results show, that the working capital accounts react differently to changes in purchasing conditions and variations in demand, the most sensitive being raw material inventories. The study quantifies the influence of purchasing constraints on each working capital value. / Business Management / M.Com. (Business Management)

Abstract in Xhosa and English / This study aimed to examine the relationship between working capital management and the financial performance of listed food and beverage companies in South Africa. Despite the existing literature on this relationship, no notable studies have investigated it in this particular industrial sector. Various data from a sample of 12 food and beverage companies listed on the JSE during the period 2007 to 2016 were collected from iress McGregor databases. Econometric regression analysis was then conducted on the data to determine the magnitude of relationships between working capital components and the financial performance of these companies. The researcher found that adopting an aggressive working capital management strategy assists in creating shareholder wealth through improved financial performance of the firm. To sum up, the shorter the cash conversion cycle, the more profitable the firm will be. / Injongo yesi sifundo kukuphonononga unxulumano phakathi kolawulo lwemali etyalelwa ukusebenza (inkunzi) nentsebenzo yemali (inzala) eyenziwa ziinkampani ezibhalisiweyo zokutya neziselo eMzantsi Afrika. Nangona kukhona okubhaliweyo malunga nolu nxulumano, akukho sifundo sigqamileyo ngeli candelo lorhwebo. Kukho iinkcukacha ezaqokelelwa kwiinkampani ezikhethiweyo ezili-12 nezibhaliswe kwiJSE. Ezi nkcukacha zazikwingqokelela egciniweyo eyaziwa ngokuba yi ‘iress McGregor databases’. Kuye kwenziwa uhlalutyo ngokuthelekisa inzala eqhele ukwenziwa naleyo kuqikelelwa ukuba iza kwenziwa kwezi nkcukacha zikaMcGregor. Oku bekusenzelwa ukubona ubungakanani bonxulumano phakathi kwenkunzi nenzala eyenziwa zezi nkampani. Umphandi ufumanise ukuba ukwakha icebo lolawulo olungqongqo lwenkunzi kuyanceda ekudaleni ubutyebi babanini zabelo ngokuphucula inzala eyenziwa liqumrhu lorhwebo. Elokuqukumbela lithi, ngokufutshanisa ivili lokuguqula imali, iya kuba ngaphezulu inzala yequmrhu lorhwebo. / Business Management / M. Com. (Business Management)

This study investigates the association between traditional and alternative working capital measures and the returns of industrial firms listed on the Johannesburg Stock E"change. Twenty five variables for all industrial firms listed for the most recent 10 years were derived from standardised annual balance sheet data of the University of Pretoria's Bureau of Financial Analysis. Traditional liquidity ratios measuring working capital position, activity and leverage, and alternative liquidity measures, were calculated for each of the 135 participating firms for the 1 0 years. These working capital measures were tested for association with five return measures for every firm over the same period. This was done by means of a chi-square test for association, followed by stepwise multiple regression undertaken to quantify the underlying structural relationships between the return measures and the working capital measures. The results of the tests indicated that the traditional working capital leverage measures, in particular, total current liabilities divided by funds flow, and to a lesser e"tent, long-term loan capital divided by net working capital, displayed the greatest associations, and e"plained the majority of the variance in the return measures. At-test, undertaken to analyse the size effect on the working capital measures employed by the participating firms, compared firms according to total assets. The results revealed significant differences between the means of the top quartile of firms and the bottom quartile, for eight of the 13 working capital measures included in the study. A nonparametric test was applied to evaluate the sector effect on the working capital measures employed by the participating firms. The rank scores indicated significant differences in the means across the sectors for si" of the 13 working capital measures. A decrease in the working capital leverage measures of current liabilities divided by funds flow, and long-term loan capital divided by net working capital, should signal an increase in returns, and vice versa. It is recommended that financial managers consider these findings when forecasting firm returns. / Business Management / D. Com. (Business Management)