Effects Of Working Capital Management Practices On Profitability

Proper working capital management is essential for business survival. This is based on the fact that a firm¿s inability to identify relevant working capital management practices can be its source of inability to perform. The general objective of this study was to determine the effects of working capital management practices on profitability of Small and Medium Enterprises (SMEs) in Nairobi County which was guided by the following specific objectives; to determine the effect of cash conversion cycle on profitability of SMEs of Nairobi County, to establish the influence of inventory holding period on profitability of SMEs of Nairobi County, to determine the effect of accounts receivable period on profitability of SMEs of Nairobi county, to establish the effect of accounts payable period on profitability of SMEs of Nairobi county and, to establish the effect of the approaches of working capital management on profitability of SMEs of Nairobi county. The study provided insight on which working capital management practices are efficient and necessary for the success of SMEs.