WORKING CAPITAL MANAGEMENT AND PROFITABILITY OF LISTED CONGLOMERATES IN NIGERIA
Musa Samuel Jerry, PhD
Volume 2 Issue 2
Abstract
Every company's long-term viability is primarily based on its ability to manage its working capital in an effective manner. Listed Nigerian conglomerates' profitability was compared to their working capital management practices in this study. Secondary data from twenty-one conglomerates' financial reports (2011–2020) was used to meet this goal. Return on asset was used to assess the profitability and firm size was employed as the control variable, the working capital was proxied by accounts receivable period, cash conversion cycle, and inventory conversion period. Descriptive statistics, correlations, and regression analyses were used to examine the collected data. Account receivable days positively and significantly affect return on assets, whereas inventory days were found to have a negative and significant impact on return on assets, and accountable payable days were shown to have a significant negative impact on return on assets, as shown in the results. Control variables are also statistically significant in predicting asset return. The study therefore recommends that, Nigerian conglomerates should implement strategies to improve their financial performance by efficiently managing their working capital. Keywords: Accounts Payable, Accounts Receivable, Conglomerates, Profitability, Working Capital Management
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