Extent of Application of the Manufacturing Firms’ Working Capital Management Practices

Abstract

We believe small is beautiful. When small businesses can grow faster and grow healthier, it will benefit the whole society. Despite the immense contribution and great potential in the SMEs to the economy, various research indicate that they suffer from various areas such as the lack of proper knowledge on working capital management Practices which in turn poses a threat on the survival of Small and Medium Enterprise. A good number of firms have put sufficient cash in working capital. Working capital management (WCM) is an important factor of financial management (FM). Debtor, creditor and inventory are the major components of working capital (WC). This research was targeting the manufacturing firms in Kigali city, Rwanda. This is because manufacturing as the growing sector is heavily contributing to the growth of Rwanda’s Economy and EAC region. The data were collected through paper and pen questionnaires as well as electronic questionnaires on 180 respondents from manufacturing firms at Kigali City during the year 2022 covering the year 2021. It was analyzed using the statistical software Statistical Package for the Social Sciences (SPSS) using descriptive statistics and Pearson’s correlation coefficient.