Working Capital Management and Financial Performance of Manufacturing Companies in Nigeria
This study examined the relationship between Working capital management and financial performance of manufacturing companies in Nigeria. Secondary data was extracted from Nigeria Exchange Group website for ten manufacturing companies cutting across consumer goods, industrial goods and health sector of the economy for the period of 2011- 2020. The Research used a panel data regression analysis and finally adopted cross sectional random effects panel data Ordinary Least Square to estimate the observed data for validation of the various research questions. For ease of analysis and presentation, the researcher adopted trade payable, trade receivable and inventory turnover as a proxy for working capital while using Return on Equity ((ROE) to represent manufacturing companies’ performance. Therefore, the finding thereby validates and confirm that inventory turnover and liquidity has no significant impact on ROE, the study also reveals that there is marginal positive effect of trade payable on ROE differing to the a priori expectation of negative relationship. The study therefore maintains that there is marginal significant effect of working capital on the performance of manufacturing companies which stipulates that there are other factors like sustainability factor, environmental, macro-economic conditions. The findings hereby conclude that receivables as part of working capital do significantly affects manufacturing performance via working capital management Based on the findings, it is recommended that emphasis should be hinged on effective credit policy and their management and strict adherence against high bad debt occasioned from high receivables. Keywords: Working capital management, Financial performance, Manufacturing companies,