Working Capital Management and Performance of Manufacturing and Distributing Firms Listed on Ghana Stock Exchange

This study critically examines the imperative for enhanced working capital management (WCM) among Ghanaian firms, with a particular focus on the performance of manufacturing and distribution companies listed on the Ghana Stock Exchange (GSE) between 2003 and 2015. Addressing a significant gap in the extant literature, the research investigates the nexus between working capital management, trade credit, and firm performance within the underexplored Ghanaian context. A quantitative analysis was conducted on panel data from 18 purposively sampled firms using Pearson correlation and multiple regression techniques, while controlling for firm-specific effects. The empirical findings indicate that, among the components of WCM, only the average collection period demonstrates a statistically significant and causal impact on return on assets (ROA). Complementary qualitative insights gathered through interviews with industry practitioners reveal a strong consensus on the pivotal role of effective WCM in enhancing firm profitability. The study concludes with practical recommendations aimed at strengthening working capital strategies to improve the financial performance of firms operating in emerging economies such as Ghana.