THE ANALYSIS WORKING CAPITAL MANAGEMENT AND PROFITABILITY OF CONSUMER GOODS INDUSTRIES IN RWANDA

This study investigates the impact of working capital management (WCM) onthe profitability of consumer goods industries in Rwanda, an area of growingconcern given the sector’s critical contribution to national GDP and thepersistent challenges in liquidity and operational efficiency. The researchspecifically aimed to assess how inventory, cash management, accountsreceivable, and accounts payable influence profitability, while considering firmcharacteristics as a control variable. A mixed methods approach was used,integrating secondary financial data from 2013 to 2017 with primary datacollected through structured questionnaires and interviews with staff fromBRALIRWA Plc, INYANGE Industry, SKOL Brewery, and EnterpriseUrwibutso. Quantitative analysis using SPSS revealed strong positiverelationships between WCM components and profitability, with inventory (β =0.342, p< 0.001), cash (β = 0.695, p< 0.001), accounts receivable (β = 0.749, p<0.001), and accounts payable (β = 0.750, p< 0.001) all significantly influencingnet profit margin. Additionally, firm characteristics significantly moderated therelationship between WCM and profitability (β = 0.041, p< 0.001). The overallcorrelation coefficient was 0.906, indicating a strong positive association. Thefindings confirm that effective WCM is essential for enhancing profitability andthat strategic alignment with firm specific attributes boosts performanceoutcomes. Based on these results, it is recommended that consumer goods firmsin Rwanda adopt automated inventory systems, enforce strict receivablespolicies, optimize payables timing, and leverage their structural characteristicsto improve working capital cycles. These findings are vital for policyformulation, managerial decision making, and future academic inquiry inemerging economies.