Financial management practices of pharmaceutical companies in Ghana, the case of three selected pharmaceutical companies in Kumasi metropolis

Abstract

The main aim of this study was to examine the challenges of financial management practices of pharmaceutical companies in Ghana using three selected pharmaceutical companies in Kumasi Metropolis. This was as a result of the fact that pharmaceutical firms mainly focus on bank loans and equity as their main source of funds in financing their operations giving less attention to efficient working capital as a feasible option. A set of questionnaires was administered on 25 persons from large and small pharmaceutical firms in Kumasi. Survey monkey and Microsoft excel were used to collect and process the data. The research revealed that pharmaceutical firms face low profitability, liquidity challenges, inability to unlock capital to finance growth and an increased funds tied up in working capital. It is recommended that pharmaceutical firms need to re-analyse the factors that determine their working capital in order to come up with best practices and to lessen the challenges in the financial management. Again the pharmaceutical firms need to change their working capital management policy from informal to formal to improve their management practices.