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| The Effect of Accounts Receivable Management on the Performance of Tanzanian Agricultural Firms |
Muhsin M. Danga, Ismail Juma Kaudunde and Peter B Kadilikansimba
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Abstract:
The purpose of the study was to investigate the impact of accounts receivable on the firm’s performance. The study involved thirty-four Tanzanian agricultural firms for a period of twelve years, starting from 2006 to 2007. The study employed panel data analysis using both fixed effect and random effect model to analyze the impact of accounts receivable on the performance of the firm. The study results revealed a significant negative relationship between ACP and profitability of the firm in the case of liquidity; it showed a significant positive relationship between ACP and the liquidity of the firm. The research results suggest that financial managers may push up the profitability of the firm by reducing the number of accounts receivable to the reasonable minimum number of days while the firm may boost its liquidity by investing more in accounts receivables
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