How working capital management affects the profitability of Afriland First Bank of Cameroon? A case study

Serge Piabuo ()

MPRA Paper from University Library of Munich, Germany

Abstract: The main objective of this study is to assess the effect of working capital management on the profitability of Afriland First Bank Cameroon. Time series data from 2002 to 2013 was extracted from the financial statement of the bank. Correlation analysis and ordinary least Square regression were used to determine how working capital affects profitability. The findings of this study show that working capital management effectively influences the performance of Afriland First Bank. The analysis revealed that customer deposits, the size of the bank, outstanding expenditure and return on assets all have a positive impact on bank profitability and are statistically significant while loan portfolio has a positive impact on bank performance but is statistically insignificant. On the other hand, reserves have a negative impact on bank profitability. Thus efficient management of working capital is prerequisite for growth and profitability of commercial banks in general and Afriland first Bank in particular.

Keywords: Profitability; Working capital management; Return on assets (search for similar items in EconPapers)
JEL-codes: G2 G21 G22 G24 G3 G31 G32 (search for similar items in EconPapers)
Date: 2016-07-09
New Economics Papers: this item is included in nep-ban, nep-cfn and nep-eff
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Published in Business and Management Research Journal 7.6(2016): pp. 89-99

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