Search

This study has sought to determine the effects of working capital management policies on shareholder value creation for six manufacturing firms listed at the Ghana Stock Exchange for the period of 2000-2013. Data were gathered from the annual reports of the firms and the publication of Ghana Stock Exchange. The study employed a longitudinal explanatory non-experimental research design applied to a dynamic panel Autoregressive Distributed Lags methodology framework for analysing the data. The results indicated that conservative current asset investment policies increase economic value added (EVA), whereas aggressive current asset investment policies enhance market-to-book ratio and Tobin’s Q in the long-run. On the other hand, conservative current asset financing policies enhance market-to-book ratio, Tobin’s Q, and EVA in the longrun. Thus, investors discount aggressive current assets’ financing policies. A firm pursuing an aggressive current asset investment policy should balance it with a conservative current asset financing policy to create value for its shareholders.

This study sought to determine the effects aggressive/conservative current asset investment and financing policies have on firms′ return for six manufacturing firms listed at Ghana Stock Exchange for a period of 2000-2013. Data were obtained from the annual reports of the firms and the Ghana Stock Exchange. The study adopted longitudinal explanatory non-experimental research design applied to dynamic panel ARDL framework in analyzing the data. The results revealed that the current asset investment and financing policies have highly significant positive effects on returns to equity holders in the long-run. The empirical evidence suggests that conservative current asset investment policies increase firms return while conservative financing policies yields negative returns. The study therefore would enable finance managers to be able to fashion out the appropriate working capital management policies. A firm pursuing conservative current asset investment policy should balance it with aggressive current asset financing policy in order to enhance profitability and create value for their investors.

This study sought to examine the relationship between the aggressive/conservative current asset investment and financing policies for six manufacturing firms listed at Ghana Stock Exchange for a period of 2000-2013. Data were sourced from the annual reports of the firms and the publication of Ghana Stock Exchange. Descriptive statistics, One-way ANOVA and rank order correlation were used for analyzing the data. The results revealed that the listed manufacturing firms were following moderate working capital management policies. The study found significant differences among the current asset investment policies across different firms. However, no significant differences were observed for firms' policies concerning relative aggressive/conservative current asset financing. Additionally, these significant differences or otherwise are not stable over time with the instability more prevalent in the current liability management. [ABSTRACT FROM AUTHOR]