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Vol.10 No.1 January - June 2016
ISSN 0855-9163

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Articles in this Issue

The Effect of Aggressive Working Capital Management Policy On The Performance Of Listed Companies In Ghana

Moses Oppong, Alexander Owiredu & Rebecca Davis


Working Capital Management isanimportantpart of the financialmanagementactivities of companies as it tends to have effect on liquidity and overall profitability of organisations. It is argued in finance literature that an optimal working capital enhances profitability. Traditional studies on working capital management have tried to prove this by examining the effect of working capital management on the profitability of companies. We deviate from this norm by examining the effect of aggressiveness of working capital management policy on the profitability of Ghanaian registered companies. Using the financial statements of 21 Ghana Stock Exchange listed companies covering the period 2006 to 2011, we examined how their retur non-equity and returnon assets wereinfluenced by the aggressiveness of the working capital policy.Data obtained was analysed using regression analysis.Our empirical results show a negative relationship between working capital management policy and the measures of profitability adopted. We conclude that management cannot increase profit by adopting a very aggressiveworkingcapitalmanagementpolicy.

An Empirical Assesment of Supply Chain Effectivenes Using Exploratory Factor Analysis (EFA) Approach: The Case of Selected Beverage Firms in Ghana

Ernest Ofori-Nyarko


There has been little contribution to academic debate and knowledge in terms of what constitutes supply chain (SC) effectiveness. This study therefore assessed supply chain effectiveness using selected beverage firms in Accra, Ghana. A quantitative research techniquewas primarily employed in this study. Participants were senior employees in the selected beverage firms. The simple random sampling procedure was used to draw 214 respondents from the population. Exploratory Factor Analysis (EFA) was themain statistical tool of data analysis and presentation. Results reveal that SC effectiveness is defined by two constructs. The first construct is SC strategy and this accounts for the highest variance (53.7%) in SC effectiveness. This construct is made up of variables relating to the general approach and strategy to supply chainmanagement. The second construct is SC outcomes, and this accounts for 20.1% of the total variation in SC effectiveness. This construct is made up of variables relating to the end-results of SC management in an organization. For beverage firms to maximiseSCeffectiveness therefore, theyneedtofocusonimplementingthebestSCstrategythat will yieldexpectedSCoutcomes.

Evaluation of Debt Recovery Strategies of Micro-Finance Institutions In The Greater Accra Region of Ghana

Mr. Akrobor, S.T


Debt recovery is crucial if micro-finance institutions are to achieve self-sufficiency and sustainability. Themain purpose of the study was to evaluate the effectiveness of debt recovery strategies used by microfinance institutions inAccra. Thestudyspecifically investigatedthestrategiesput inplacebythe institutions to minimize risk of loan non-repayment; assessed the strategies adopted by the institutions to recover debt fromclients; and examined the level of effectiveness of the debt recovery strategies used by the institutions. A structured questionnaire was used to gather data from employees of the selectedmicrofinance institutions. Tenmicrofinance Institutions intheGreater Accra region of Ghanawere sampled. Overall, 60 employeeswere sampled comprising 10management staff and 50 credit officers. The study found that the institutions adopted a number of strategies including demand for collateral security; early disbursement of loan; extensive screening of clients etc., to reduce the risk of loandefault. The institutions alsousedseizure of collateral;deductions fromsavings; deduction fromguarantors' income; and legal actions to recover loans in default fromclients. The debt recovery strategies of institutions were effective in improving overall operational efficiency and profitability. The study recommends that microfinance institutions improve on their effectiveness in debt recoveryinorder toremain viablewithin themicrofinanceenvironment.

Examining The Tax Implications For The Adoption of International Financial Reporting Standards (IFRS) In Ghana

Abedana, V. N., Adom-Frimpong, K., Omane-Antwi, K. B.


This paper examines the tax implications of listed companies in Ghana for the adoption of International Financial Reporting Standards (IFRS), particularly International Accounting Standard (IAS) 12. Financial statements from annual reports for twenty two (22) firms were used for the analysis. A theory of accounting choice was used as the theoretical framework with all other relevant related literature reviewed. A sequential explanatory strategy for mixedmethods research approachwas used with data sourced from three different sources; that is observation and extraction from financial statements, questionnaire and an interviewguide. The results triangulate to indicate that there are tax implications following the adoptionof IFRS particularly IAS12by listed firms inGhana. Current year tax expensesofentitiesonaveragereducemarginallyby0.7%whenrestatedinIFRSfromGNAS. Intermsof reported tax amounts by industries,manufacturing / trading entities showed increases in current year tax expenses by 13% while financial/insurance/information technology companies saw decreases in their current year tax expenses by 13.3%. It also reveals that there are no differences between GNAS and IFRS reported amounts of corporate taxes. The study provides empirical evidence to create the awarenessof tax implicationsfor theadoptionof IFRSsinGhana.

Relevance of Public Relations in Building The Corporate Reputation of an Organisation: An Exploratory Study of Two Manufacturing Organisations in Ghana.

Albert Anani Bossman & Vida Osei Bonsu


In a globalised world that is also very competitive, businesses are faced with the enormous challenge of surviving and staying strong. One of such big challenges is building andmanaging the reputation of the organisation. Corporate reputation has been identified over the years as one of themost important intangible assets of any organisation. The success of any organisation is strongly linked to how it is perceived by its stakeholders. Scholars across various disciplines, including marketing, sociology, communication andmanagement have devotedmuch attention to this phenomenon. In order to build and manage a strong reputation, an organisation must be able to communicate effectively with the stakeholders. Effective communication allows an organisation to convince and persuade its stakeholders to remain loyal in the face of keen competition. Studies have shown that public relations shouldbeat theforefrontof suchcommunicationactivities.Public relations facilitates theeffortsof the organisation to build andmanage a positive reputation in the eyes of its stakeholders. This paper tries to understand the relevance of public relations in building the corporate reputation of an organisation. The paucity of literature in a developing country like Ghanamakes this research evenmore essential. The qualitative research approach was used in gathering data. Face to face interviews were held with two communicationmanagers of twomultinational companies toprovide input for the research.Result demonstratedthatpublic relationsplays a critical role inbuilding the reputationofanorganisation. The day to day communication activities of an organisation's PR department coupled with other activities such as social responsibility, feedback and constant engagement with the publics contributes largely to positive evaluation of the organisation. This outcome has significant implications for the practice of public relations.

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