Working Capital Management Practices and Profitability of Multi-purpose Cooperatives in Laguna

Managing financial resources effectively can make or break a business, and for multipurpose cooperatives, working capital management plays a crucial role in sustaining profitability. This purpose of this study was to determine the relationship between working capital management practices and profitability of multipurpose cooperatives in selected districts of Laguna, including Calamba, Cabuyao, Bay, and Los Baños. A descriptive-correlational research design was employed, with data collected from 48 cooperatives through a survey, which was pre-tested to ensure reliability. The study addressed key questions regarding business profiles, including business age and capital, as well as current working capital management practices, specifically cash management, inventory management, accounts receivable management, and accounts payable management. Data analysis revealed that most multipurpose cooperatives have been operating for over five years and possess business capital ranging from Php 15,000,001 to Php 50,000,000. Results indicate that cash management, inventory management, and accounts payable management are fully implemented, while accounts receivable management is implemented to a slightly lesser extent. ANOVA results showed no significant differences in working capital management practices when grouped by business capital. However, Pearson correlation analysis found that efficient cash management, accounts receivable management, and accounts payable management were positively correlated with profitability, as measured by net profit margin. In contrast, inventory management showed no significant correlation with profitability. These findings suggest that multipurpose cooperatives with optimized cash flow, receivables, and payables management are more likely to experience higher profitability, while inventory management does not show a strong relationship with profitability. The study concludes that effective working capital management practices can contribute to enhanced profitability and long-term sustainability for multipurpose cooperatives in Laguna.