An analysis of working capital management efficiency in the sugar industry: A case of mumias sugar

Analysis of working capital management efficiency was done on Mumias Sugar Company limited. Panel regression analysis was employed for period covering 2006 to 2011 to find the relationship between working capital management efficiency and profitability and liquidity in the sugar industry. The analysis was done to find statistical evidence to support or reject the two hypotheses. Result for panel regression indicated that profitability is negative but statistically insignificant. Liquidity is negative and statistically significant. This indicates that there is significant impact of Liquidity on working capital management efficiency. Beta coefficients associated with all the variables are statistically significant at 5% level. These variables explain around 84. 6% of variation in working capital management efficiency. The remaining variables incorporated in the model explain only 15. 4% of the variation. These facts conclude that Liquidity play a major role in on working capital management efficiency of the sugar- producing firms, while profitability do a dismal role.