THE IMPACT OF WORKING CAPITAL MANAGEMENT ON PROFITABILITY OF A SMALL AND MEDIUM ENTREPRISE IN RWANDA Case study - Nyirangarama Enterprise (Period of study 2009 - 2012)

Abstract

Working Capital Management affects the Profitability of a small and medium enterprise in Rwanda. Generally working capital consists of various components of current assets like inventories, bills, receivables, debtors, cash and bank balances and prepaid expenses. This implies that enterprises main target is making profits and this can only be successful if working capital concepts stated are fully managed. This research aims to analyze the significant effect of working capital management on profitability of an enterprise in Rwanda. Working capital management affects profitability and this leads to development of an SME. Therefore what is the level of managing all the components of managing capital in SMEs? How does each relate to the other? What is the correlation of their relationship impact the success of the business entity? This indicates that there is a gap for appropriate management of capital in SMEs, what can be done to enlace working capital management and all its components in growing SMEs?