A COMPARATIVE STUDY OF WORKING CAPITAL MANAGEMENT PRACTICES: A CASE STUDY OF ETHIOPIA WITH, AUSTRALIA, CANADA, UNITED STATES

Abstract

: This research has been undertaken to explore the working capital management practices of manufacturing companies in Ethiopia and make comparison with previous similar studies. The study has used survey method on a sample of 144 manufacturing companies in Ethiopia which were selected using two-stage stratified random sampling. Survey analysis has been used to analyse the data and the results were presented using tables followed by explanation. The result showed that the manufacturing companies in Ethiopia have formal and situational working capital policy that are under the responsibility of financial managers who make working capital review per year. The finding also shows that much time is dedicated towards the management of working capital through use of various managerial methods and techniques. The result showed that there are some similarities and differences in the managerial methods and techniques employed among the manufacturing firms of United States, Australia, Canada, Pakistan and Ethiopia. The difference in the working capital management practices could be attributable due to time factor, the size of the firms as well as cultural difference across the international boundaries.