The Relationship between Working Capital Management and Financial Sustainability of Selected Christian Denominations in Ghana

Williams Kwasi Peprah, Isaac Anowuo and Daniel Adofo Kwakye Ameyaw

Applied Finance and Accounting, 2019, vol. 5, issue 2, 20-25

Abstract: Management of working capital is a fundamental aspect of finance. This is because it affects the church's liquidity and financial sustainability. The study sort of establishing the relationship between working capital and financial sustainability for selected Christian denominations in Ghana. Using bivariate correlation application in SPSS 23, the financial statements from 2013 to 2017 of 15 Christian Council of Ghana denominational members conveniently sampled and analyzed. Working capital is represented by liquidity ratios of current ratio, and cash ratio and financial sustainability are epitomized by self-support. The study revealed that there was a positive relationship between working capital and financial sustainability among Christian denomination in Ghana. In a detailed outcome, there was a statistically small positive significant relationship between self-support and cash ratio and statistically large positive significant relationship between self-support and current ratio. The study recommends to churches in Ghana to seek an enhancing relationship between their working capital and financial sustainability to prevent a possible closure of the church. Not-for-profit organizations must seek self-support through income generation and diversification to improve their Liquidity. Again, not-for-profit organizations must have a positive relationship between working capital and financial sustainability in that churches exist because of liquidity.

Keywords: working capital; financial sustainability; liquidity ratio; current ratio; cash ratio; self-support (search for similar items in EconPapers)
Date: 2019
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