Working Capital Management and Financial Performance of Listed Manufacturing Companies in Nigeria

Abstract

The study examined the relationship between working capital management and financial performance of listed manufacturing companies in Nigeria. It retrieved secondary data from the annual reports of the ten listed manufacturing companies, for a period of five years (2016-2020) and analyzed them using ordinary least square multiple regressions. It used debtors collection period and creditors payment period as the dumensions of working capital management as the independent variables, with return on assets and return on equity as the proxies for company’s financial performance. The results showed that creditors payment period and debtors collection period have no significant relationship with both return on assets and return on equity. The study recommends that the managers of the sampled manufacturing companies should review their working capital management strategies and future studies should be based on a combination of secondary data and primary data.

Keywords

• Working capital management
• financial performance
• manufacturing firms

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