EFFECT OF WORKING CAPITAL MANAGEMENT ON THE PROFITABILITY OF LISTED NIGERIA MANUFACTURING FIRMS.
Abstract
This study investigates the effect of working capital management on the profitability of selected manufacturing firms listed on the Nigerian Stock Exchange between 1994 and 2024. The research employs a panel data regression model to analyze the relationship between Return on Investment (ROI) and key working capital components: Current Ratio (CR), Accounts Receivable (AR), and Accounts Payable (AP). Data were collected from five major manufacturing firms with complete financial statements for the study period. The results reveal that the Current Ratio and Accounts Payable have a positive and significant effect on ROI, indicating that efficient liquidity management and trade credit usage enhance profitability. Conversely, Accounts Receivable has a significant negative effect, suggesting that poor credit policies or delayed collections reduce profitability. The findings underscore the importance of balancing liquidity and profitability through effective working capital strategies. The study contributes to the growing body of literature on corporate finance in emerging markets and offers practical insights for financial managers, investors, and policy makers on optimizing working capital for improved firm performance.
Full-Text Access Notice
In accordance with the NERD Policy on promoting peer-reviewed publication, public access to the full text of a project, thesis or dissertation is restricted for three years, allowing the author and supervisors sufficient time to pursue peer-reviewed publication.
During this period, researchers with legitimate academic or research purposes may request authorisation directly from the author to enable NERD to release the indexed full texts of the work using the form below.