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Working capital management has lately been a hot topic since the financial crisis of the late 2000’C, Companies search for liquidity and operational efficiency through minimizing their investment in working capital. How can influence of working capital management affect organization performance? This has been studies in this thesis. Specifically, the study was set in order to meet three objectives, namely; to analyze trend of Net Working capital at Zanzibar Social Security Fund, to assess the efficient of Net Working capital at ZSSF and to examine the contribution of net working capital to organization performance at ZSSF.
To achieve these objectives, the study used a sample of 50 respondents who were randomly selected. Data collected by use of questionnaires, interviews, observation and documentary reviews were computed and analyzed by using SPSS computer software and Excel program. Tables and figures were used to helps the presentation of the findings.
The efficient of working capital management can be determined by the working capital components such as cash, account receivables, account payables, inventories and other receivables. By testing five independent variables with organization performance by reducing cash, inventory and efficiency management of other components.
The main findings indicate that ZSSF consider working capital management an important issue, yet some challenges appeared on efficiency on the payment of monthly pensionable amount to its pensioners. It is evident that the respondents placed greater emphasis or importance on the analysis of trend of net working capital, assessing the efficient of net working capital and contribution of net working capital to organization performance.
Some effort is made to manage cash, accounts receivable, inventory and accounts payable and other receivables independently of each other, however given the theory of working capital management; there may be room for improvement regarding the strategies, tactics and techniques used to manage these components. Furthermore, the findings suggest that working capital management is also strategic as it impact on the liquidity, solvency/bankruptcy, efficiency, profitability and shareholder wealth maximization of the business.
In light of the findings, it was recommended that ZSSF should improve the process of payments to its members and should ensure that benefits are paid timely and to the right person. Also the comparative study of the research should be conducted in order to assess the influence of working capital management on the performance of various pension funds operated in Tanzania. As part of this study a further area for research should be empirical investigations into the impact of working capital on company performance specifically in the service sector industry, and here the case study approach could be considered. |
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