EFFECT OF WORKING CAPITAL MANAGEMENT ON THE PROFITABILITY OF SELECTED LISTED FIRMS IN NIGERIA

This research tracked how working capital management shapes how much profit selected listed firms in Nigeria make. The central focus was to see how key parts of working capital play into firm profit. Targets were clear: check how inventory turnover days, average collection period, current ratio, and cash conversion cycle link with return on assets. Data came strictly from yearly reports and financials of eleven firms across different sectors on the Nigerian Stock Exchange between 2018 and 2023. Profitability was measured by return on assets, while the predictors were inventory turnover days, average collection period, current ratio, and cash conversion cycle. The study was set on ex post facto structure and leaned on panel data analysis. Early steps involved descriptive summaries, trend checks, and basic diagnostic screens. Panel regression took the lead, with the fixed effects model winning after the Redundant Fixed Effects test. Results pointed out that inventory turnover days had a slight negative tie with profit but held no weight. The average collection period leaned positive but lacked power. The current ratio stood out with a clear, strong, and meaningful lift to profitability. Cash conversion cycle also leaned positive but did not cross the impact mark. The main takeaway was that keeping liquidity in check through the current ratio matters most for boosting firm profits in Nigeria. The study advised firms to hold solid liquidity levels and shape their approach to stock, receivables, and full working capital based on how their industry runs and what their operations demand.