Impact of working capital management on the profitability of manufacturing companies listed on the Nigerian Stock Exchange

Working capital management refers to the management of the short-term assets of a business. It is very important and plays a vital role for firms‟ profitability. In spite of its importance, there is a serious dearth of literature on working capital management and profitability especially in sub-Sah...

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Main Author:	Aminu, Yusuf
Format:	Thesis
Language:	eng eng
Published:	2014
Subjects:	HG Finance
Online Access:	https://etd.uum.edu.my/5347/1/s93781.pdf https://etd.uum.edu.my/5347/2/s93781_abstract.pdf
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id	my-uum-etd.5347
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Zainudin, Nasruddin
topic	HG Finance
spellingShingle	HG Finance Aminu, Yusuf Impact of working capital management on the profitability of manufacturing companies listed on the Nigerian Stock Exchange
description	Working capital management refers to the management of the short-term assets of a business. It is very important and plays a vital role for firms‟ profitability. In spite of its importance, there is a serious dearth of literature on working capital management and profitability especially in sub-Saharan Africa, particularly Nigeria. Therefore, the objective of this study is to investigate the impact of working capital management on the profitability of the manufacturing companies listed on the Nigerian Stock Exchange. Panel data methodology was employed to test this relationship with both the fixed and the random effects estimation techniques. Accordingly, all the manufacturing companies on the Nigerian Stock Exchange totalling 55 were drawn as the sample and the study was conducted for five years (2008-2013). Data were obtained from the financial statements of the companies through the Securities and Exchange Commission. Findings from the panel data regression analysis revealed that average collection period and inventory conversion period were significantly negatively related to profitability, which suggests that the shorter the periods the higher the profitability of the manufacturing companies. However, average payment period was positively and significantly related to profitability, depicting that the longer the period, the higher the profitability. The debt ratio and other current liabilities to the total assets ratio were not significantly related to profitability. Finally, the study provides managerial implications and the direction for future research
format	Thesis
qualification_name	Ph.D.
qualification_level	Doctorate
author	Aminu, Yusuf
author_facet	Aminu, Yusuf
author_sort	Aminu, Yusuf
title	Impact of working capital management on the profitability of manufacturing companies listed on the Nigerian Stock Exchange
title_short	Impact of working capital management on the profitability of manufacturing companies listed on the Nigerian Stock Exchange
title_full	Impact of working capital management on the profitability of manufacturing companies listed on the Nigerian Stock Exchange
title_fullStr	Impact of working capital management on the profitability of manufacturing companies listed on the Nigerian Stock Exchange
title_full_unstemmed	Impact of working capital management on the profitability of manufacturing companies listed on the Nigerian Stock Exchange
title_sort	impact of working capital management on the profitability of manufacturing companies listed on the nigerian stock exchange
granting_institution	Universiti Utara Malaysia
granting_department	Othman Yeop Abdullah Graduate School of Business
publishDate	2014
url	https://etd.uum.edu.my/5347/1/s93781.pdf https://etd.uum.edu.my/5347/2/s93781_abstract.pdf
_version_	1747827913995059200
spelling	my-uum-etd.53472022-04-10T00:04:34Z Impact of working capital management on the profitability of manufacturing companies listed on the Nigerian Stock Exchange 2014 Aminu, Yusuf Zainudin, Nasruddin Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HG Finance Working capital management refers to the management of the short-term assets of a business. It is very important and plays a vital role for firms‟ profitability. In spite of its importance, there is a serious dearth of literature on working capital management and profitability especially in sub-Saharan Africa, particularly Nigeria. Therefore, the objective of this study is to investigate the impact of working capital management on the profitability of the manufacturing companies listed on the Nigerian Stock Exchange. Panel data methodology was employed to test this relationship with both the fixed and the random effects estimation techniques. Accordingly, all the manufacturing companies on the Nigerian Stock Exchange totalling 55 were drawn as the sample and the study was conducted for five years (2008-2013). Data were obtained from the financial statements of the companies through the Securities and Exchange Commission. Findings from the panel data regression analysis revealed that average collection period and inventory conversion period were significantly negatively related to profitability, which suggests that the shorter the periods the higher the profitability of the manufacturing companies. However, average payment period was positively and significantly related to profitability, depicting that the longer the period, the higher the profitability. The debt ratio and other current liabilities to the total assets ratio were not significantly related to profitability. Finally, the study provides managerial implications and the direction for future research 2014 Thesis https://etd.uum.edu.my/5347/ https://etd.uum.edu.my/5347/1/s93781.pdf text eng public https://etd.uum.edu.my/5347/2/s93781_abstract.pdf text eng public Ph.D. doctoral Universiti Utara Malaysia Afza, T., & Nazir, M. S. (2007). Working capital approaches and firm‟s returns. Pakistan Journal of Commerce and Social Sciences, 1(1), 25-36. Ajibade, B. L. (2010). Nigeria and the Economic Reforms. A paper presented at the Raw Materials Research and Development Centre on 26/11/10, Aguyi Ironsi Street, Maitama, Abuja. Akinbuli, S. F. (2006). Financial accounting: Principles and profitability. Lagos: BPrint Publishers. Ali, S. (2011). Working capital management and the profitability of the manufacturing sector: A case study of Pakistani textile industry. The Lahore Journal of Economics, 16(2), 141-178. Alipour, M. (2011). 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Impact of working capital management on the profitability of manufacturing companies listed on the Nigerian Stock Exchange

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