Work

The Effect of Working Capital Management on Corporate Profitability: Evidence from Nigerian Food Product Firms

Year: 2015

Type: article

Abstract: The paper examines the impact of working capital management on corporate profitability through the periods of 2008 to 2012. The total of seven firms listed on the floor of the Nigerian Stock Exchange was studied, using secondary data generated from annual reports and accounts of the sampled companies and the Nigerian Stock Exchange Fact book. The data were analyzed by means of descriptive statistics and GLS regression analysis using STATA 11. The study finds a positive relationship among Average Collection Period (ACP), Current Ratio (CR) and the size of the firm (LOGSIZE) with Profitability and a negative relationship with Inventory Turnover Period (ITP), Average Payment Period (APP). The paper therefore recommends that cash collected should be re-invested into short-term investment to generate profits and fund left idle in the cash or excessive liquidity is costly and do not lead to profitability.

Source: Applied Finance and Accounting

DOI: 10.11114/afa.v1i2.842

Authors: Sabo Muhammad, Rabi’U Saminu Jibril, Usman Sani K. Wambai, Fatima Bello Ibrahim, Tjjani Habibu Ahmad

Institutions: Kano State Polytechnic, Maitama Sule University Kano, Hussaini Adamu Federal Polytechnic

Language: English

Topic: Working Capital and Financial Performance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: bronze

OpenAlex ID: W1490768432

FWCI: 9.164

Cites: 27

Cited by: 24

Related to: 10