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September 5, 2025African Journal of Accounting and Social Science Studies

Determinants of Working Capital Requirements Listed Companies in East Africa: An Empirical Study Using Generalised Method of Movements

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Authors

SSSadiki SumaweLMLucas Magoti

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Overview

Empirical findings highlight the role of return on assets and firm size on working capital, suggesting effective management is essential for financial stability.

Key Points

  • Return on assets significantly influences working capital, indicating firms should focus on profitability to improve financial health.
  • Leverage negatively impacts working capital requirements, meaning higher debt can reduce necessary liquidity for operations.
  • Cash conversion cycle is crucial for working capital management, emphasizing the importance of operational efficiency.
  • GDP growth positively correlates with working capital needs, suggesting firms require more cash as the economy strengthens.

Cite This Study

Sumawe et al. (2025) studied this question.

synapsesocial.com/papers/68c23922b210217d6477a2c5https://doi.org/10.64717/ajass.v7i1.212
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Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1Determinants of Working Capital Requirements Listed Companies in East Africa: An Empirical Study Using Generalised Method of Movements2025
  2. 2The Mediating Effect of Working Capital on the Relationship between Debt Financing and Financial Performance: Evidence from Listed Non-Financial Firms in the East Africa Community2025
  3. 3Drivers of Firm Value: Working Capital Efficiency, Liquidity, and Firm Size. Evidence from Nairobi Securities Exchange, Kenya2025
  4. 4Advancing environmental performance in emerging economies: the roles of working capital management and capital expenditure2025
  5. 5Analysis of the Influence of Working Capital Management and Cash Holding on Profitability: An Empirical Study of Nonfinancial Sector Companies in Indonesia2025