THE EFFECT OF CREDIT MANAGEMENT ON THE PROFITABILITY OF EIGHT QUOTED MANUFACTURING FIRMS IN NIGERIA

ABSTRACT The study examined the effect of credit management on the profitability of eight manufacturing firms in Nigeria. In order to achieve the objectives of the study expost facto was adopted. Secondary data were used for the study. The study adopted judgmental sampling technique to select eight consumers’ goods manufacturing companies. These companies were chose based on availability of data for the number of five years (2018-2022) under review. A multiple regression analysis was adopted using Econometrics views. Findings revealed that receivables collection period was negatively significant on the return on assets of eight quoted manufacturing firms in Nigeria and payables payment period was positively significant on the return on assets of eight manufacturing firms in Nigeria. It was concluded that companies that extending credit to customers can boost sales and revenue, but it also carries the risk of bad debts and delayed payments. It was recommended that firms take caution on account receivable period so that it does not harm their volume of credit sales which can adversely affect their profitability and firms should increase their average payable period so that they can have internal financing to help them save cost associated with external financing.