Working capital management at Keren Metal, Wood and Cement Works: a manufacturing firm in Eritrea.

Abstract

Working capital management refers to the financing, investment and control of net current assets within policy guidelines. It seems to have been relatively overlooked, although it is realized that a high proportion of business failures are due to poor decisions concerning the working capital of the firms. This case study is devoted to analyze the working capital practices of Keren Metal, wood and Cement Works, a manufacturing firm operating under joint venture in Eritrea. The study covers areas of working capital management, which encompasses, the working capital investment, working capital finance and working capital policies of the firm. To this end, relevant literature is reviewed and compared to the actual practices of the firm. Based on the gap identified from the comparison of the theory and the application, recommendations has been forwarded as how the working capital should be practiced, so as create value to the partners of the firm.