Working capital management in cooperative business is concerned with the management of the enterprise current account which encompasses current asset and current liabilities. The management of Working Capital in Cooperatives is one of the most special aspects of industrial overall financial management. If the cooperative enterprise cannot maintain a satisfactory level of working capital, it is likely to become bankrupt. The current asset of the cooperative enterprise should be large enough to cover its current liabilities in order to maintain a reasonable margin of financial safety. Working capital management in Cooperative deals with actual management of current asset and current liabilities in the enterprise.
Working Capital can be defined as the excess of current asset over current liabilities. Onuoha(2009). Basically, there are four conventional class of current asset which are cash, inventories, marketable securities and account recurable while current liability entail account payable, accruals and taxes working capital is used to finance production to invert in stock and to provide credit to customers. A deeper understanding of the importance of working capital by a cooperative society and it’s satisfactory management can lead not only to efficiency of capital management but also assist in fulfilling the ultimate aim of the cooperative business such as increasing surpluses, maximizing cost and return on cooperative investment.
Consequently, the extent to which working capital management affect cooperative efficiency is the thrust of this study.
Working capital is the live wire of any enterprise which means that its management is quite crucial to the business. Cooperative societies of whatever type survive with efficient working capital management. The capital of the cooperative enterprise has to be effectively managed for the benefit of the cooperative business so that stated objectives can be achieved. Given every stage and level of cooperative activities, finance tends to play a significant role in the efficiency of the enterprise.
Many cooperative businesses may have adequate finance but could lack proper efficient working capital management. It is disheartening to discover that several cooperative societies seem not be performing up to expectation even in the light of apparent effective and efficient working capital management on cooperative efficiency so that informed measures could be taken to facilitate efficient working capital management in cooperatives in such a way that the cooperative business can effectively achieve stated objectives for the benefit of the members. Consequently, how working capital management affects cooperative efficiency and the modalities that could ensure effective working capital management to promote cooperative business is the thrust of the study.
The objectives of this study are to:
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