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Author(s): Adebowale Ogunsola (Ph.D, ACA), Gbadebo Ameerah Opeyemi.

Volume/Issue: Volume 5 , Issue 3 (2022)

Abstract:

This study examined the impact of working capital management on the financial performance of listed manufacturing firms in Nigeria. The population of this study consisted of all the quoted firms in the consumer goods sector in Nigeria, out of which nine (9) companies were selected based on data availability. For the 10 years spanning 2011-2020, data were gathered from the annual financial reports of the nine quoted companies in the consumer category. Descriptive statistics, correlation, and panel regression analysis methods were employed in data analysis. The outcome of the Hausman test revealed that the estimation of the random effect is the most efficient. The result revealed that inventory turnover had a positive insignificant effect on return on asset. Trade receivable collection period had negative insignificant effect on return on asset. Trade payable payment period had negative insignificant effect on return on asset. Cash conversion cycle had negative insignificant effect on return on asset. The study concluded that working capital management has no significant effect on financial performance of the selected firms over the period of the study. The study recommended that the whole system of the organization should pay more attention to working capital management.

Keywords:

Inventory Turnover, Trade Receivable, Trade Payable, Cash Conversion Period and Financial Performance

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