Okoye, Lawrence U. and ERIN, Olayinka and Modebe, Nwanneka J. and Achugamonu, Bede U. (2016) Working Capital Management and the Performance of Consumer and Industrial Goods Sectors in Nigeria. In: 28th IBIMA Conference: Theme -Vision 2020: Innovation Management, Development Sustainability, and Competitive Economic Growth, 2016.
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Abstract
The paper investigates the impact of working capital management on the performance of selected companies listed on the Nigerian Stock Exchange using panel data for forty (40) firms from the consumer and industrial goods sectors of the economy. Return on assets (ROA) was adopted as proxy for firm performance while cash conversion cycle (CCC), average payment period (APP), inventory collection period (ICP), and average collection period (ACP) were adopted as proxies for working capital management. Estimation of the impact of the exogenous variables (cash conversion cycle, average payment period, inventory conversion period and average conversion period) on firm performance (endogenous variable) was based on the econometric technique of the Ordinary Least Squares. The study produced evidence of significant positive impact of cash conversion cycle, average payment period, and inventory conversion period on firm performance. There is also evidence of non significant negative impact of average conversion period on the performance of the selected firms.Parameter estimates were obtained at 10 per cent level of significance. Based on the above result, the study concludes that working capital management has significant impact on the performance of firms in the consumer and industrial goods sectors of the Nigerian economy. Industry managers are therefore advised to innovate efficient strategies for managing working capital so as to optimize its potentials
| Item Type: | Conference or Workshop Item (Paper) |
|---|---|
| Uncontrolled Keywords: | Firm performance, Working capital management, Exogenous variable, Endogenous variable. |
| Subjects: | H Social Sciences > HF Commerce H Social Sciences > HF Commerce > HF5601 Accounting |
| Divisions: | UNSPECIFIED |
| Depositing User: | Mrs Patricia Nwokealisi |
| Date Deposited: | 22 Jun 2017 10:40 |
| Last Modified: | 29 Jun 2017 15:21 |
| URI: | http://eprints.covenantuniversity.edu.ng/id/eprint/8442 |
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