Abstract:
The objective of the study is to determine the full year profitability of tomato trade by analyzing all associated cost and compare the rate of return with the Ghana's Treasury bill rate to test the principle of risk - return tradeoff and also to determine which of them offers a better investment opportunity. This study focused on the full year marketing activities of tomato traders in the Kpando Municipality of Ghana, which comprises the lean and the glut seasons. The study employed mostly primary data and the data collected was analyzed using descriptive and inferential statistics and financial ratios. The results from the study revealed that the rate of returns for the tomato traders were higher in both seasons than that of the Treasury bill rate. The students t - Test conducted revealed that there was a significant difference between marketing margins of traders across the seasons. The study also revealed that the abnormal gains obtained in the lean season compensated for the lower gains made in the glut season. Also the higher gains obtained from investing in the tomato trade (which is a risky business) compared to the lower gains obtained from investing in a risk free business in this case the Treasury bills, further affirms the principle of the theory of risk - return tradeoff that, the higher the risk the greater the gains. The study concludes that it is more profitable to invest in tomato business than to invest in Treasury bills in Ghana. The study recommends the provision of storage and processing facilities and provision of good roads in order to ensure the full year availability of tomatoes on the Ghanaian market at affordable prices for the benefit of consumers. |
International Journal of Social Science & Economic Research
