Working Capital Management and Financial Performance of Selected Consumer Goods in Nigeria

Abstract

This study examines the relationship between the management of working capital and company performance of selected consumer goods in Nigeria. The research study adopts an ex-post facto research design. Purposive and convenience sampling techniques were adopted to select ten companies out of the fifteen companies quoted on the Nigerian Stock Exchange as at 31st December 2018. The data were analyzed quantitatively using descriptive and inferential statistics in form multiple regression analysis. Findings revealed that the average collection period has a positive and significant relationship with return on assets of the selected consumer goods in Nigeria. Likewise, inventory turnover in days is found to relate with return on equity and the cash conversion cycle is significantly related to return on sales of selected consumer goods in Nigeria respectively. The study concludes that the management of working capital has a significant impact on company performance of selected consumer goods in Nigeria. Therefore, it is recommended that consumer goods in Nigeria should pay more attention to the management of their working capital since they positively influence profitability.