MJAMR

Payables/Creditors Management And It’s Impact On Financial Performance Of Ntake Manufacturing Industry

Ariyo Gracious Kazaara, Arinaitwe Julius


Abstract

The study aimed at payables/creditors management and its impact on financial performance of Ntake manufacturing industry. Primarily, financial statements for the past 5 years were thoroughly analyzed longitudinally where crucial metrics including operating cash flows, inventory holding periods, payables days, profitability ratios and asset utilization were carefully evaluated to discern trends and how fluctuations in payables impacted overall returns. Supplementary to this quantitative phase, in-depth one-on-one interviews were also conducted with top leadership, accounts personnel as well as major suppliers using semi-structured questionnaires to garner deeper insights into prevailing vendor payment policies, challenges experienced in disbursing payment obligations on time, credit terms negotiation strategies and opportunities for improvement. From the findings, the analysis found a strong positive correlation between creditors' management and financial performance, as indicated by the R value of 0.735. This suggests financial performance was heavily influenced by creditors' management practices. The R Square value was 0.718, demonstrating that 71.8% of the variation in financial performance can be explained by creditors' management. The adjusted R square of 0.615 accounted for the number of variables in the model, confirming creditors' management strongly predicts financial performance even after correcting for additional factors. The statistical analysis revealed a remarkably strong positive correlation between creditors' management practices and overall financial performance. Given over 70% of the variation in results could be attributed to creditors' management alone, it is imperative that the organization urgently prioritizes optimizing processes and controls pertaining to this important function. A comprehensive, multi-pronged revamp of the creditors' management framework should be undertaken, spearheaded by senior leadership and closely monitored through an internal audit program.

Keywords

payables/creditors management financial performance and Ntake manufacturing industry
Metropolitan Journal of Academic Multidisciplinary Research

Cite This Article

Ariyo Gracious Kazaara & Arinaitwe Julius (2024). Payables/Creditors Management And It’s Impact On Financial Performance Of Ntake Manufacturing Industry. Metropolitan Journal of Academic Multidisciplinary Research, 3(1). https://journals.miu.ac.ug/pages/article.php?article_id=1229

More in This Issue

View full issue →
16
Drivers Of Ict Acceptance And Organizational Performance; A Perspective Of Uganda Breweries
Tumushabe Catherine
Drivers Of Ict Acceptance And Organizational Performance
17
Effect of Channel Design on the Sales Performance of Monitor Publications Limited, Kampala, Uganda
Kambedha Maria
Radio Newspaper Channel Design Sales Performance
18
Effect Of Credit Terms On Loan Portfolio Performance In Butuuro People’s Sacco Nyakabirizi Main Branch, Bushenyi District, Uganda
Agaba Evason
Credit Terms Loan Portfolio Performance Small Businesses and Enterprises
19
Female Headed House Holds and Family Welfare in Kasese District: A Case Study of Kasese Municipality
Biira Esther Bairinga, Sekiswa Peter
Family Welfare and Households
20