Abstract:
This study addresses the effect of WCM on manufacturing firms' profitability, using BRALIRWA
PLC as the case study for the period of 2019-2023. The paper, therefore, seeks to assess how effective
WCM practices of inventory, receivables, payables, and CCC have been in influencing key
profitability indicators such as ROA, ROE, and Profit Margin. It used a descriptive research design
based on secondary data from BRALIRWA's financial reports. Other analytical methods involved in
the analysis include correlation and regression analysis, which show the relationships among the
WCM components in respect to their profitability. According to the results, though efficient WCM is
critical to maintain liquidity and efficiency of operation, its components have no significant statistical
impact on the profitability of BRALIRWA. The profitability measures were highly interrelated
according to the correlation analysis, though the regression tests indicated that there are still other
variables that can affect the profitability other than WCM. Key observations gave out a fluctuating
trends in inventory, receivables, and payable management, indicating that BRALIRWA has a
negative CCC hence indicating good cash flow management.
The research, therefore, concludes that, although WCM bears an impact on the financial health of the
firm, there is scope for its optimization in respect of receivables collection, inventory turnover, and
reduction of CCC to boost profitability. Recommendations for BRALIRWA are to work on credit
policies, enhance inventory control, and adopt best practices for payable management to strengthen
cash flows and operational efficiency. It is also recommended that further studies be carried out to
investigate other variables which might have an influence on profitability in the Rwandan
manufacturing sector.
