Working Capital Management as Determinant of the Performance of Publicly Listed Companies in Nigeria

  • Ihenyen Confidence Department Of Accounting, School Of Management Sciences, Niger Delta University Amassoma
  • Joseph Idumesaro Department Of Accounting, School Of Management Sciences, Niger Delta University Amassoma
DOI: https://doi.org/10.17605/OSF.IO/3BWX7
Keywords: Working capital management, Financial performance, Accounts payable, Accounts receivable, Return on capital employed

Abstract

The present research aimed to evaluate whether the management of working capital can act as a determining factor in the financial performance of companies that are publicly traded in Nigeria. The research design employed in the study was ex post facto, and the data utilized were secondary, consisting of measures of working capital management (accounts receivables and accounts payables in days) and financial performance measures (return on capital employed) obtained from the annual reports and accounts of fourteen (14) service companies spanning the period of 2012 to 2021. The acquired data were subjected to analysis through the utilization of fixed and random effects panel data estimation techniques. The study's results indicate that the management of working capital plays a crucial role in determining the performance of service-oriented companies that are publicly listed in Nigeria. The study's results suggest that companies in Nigeria should prioritize the implementation of effective working capital management practices in order to improve their overall performance. As such, it is recommended that companies focus on optimizing their working capital management strategies. In addition, management of service companies must ensure that longer days are taken to pay back creditors; this would be better for improving the performance of service companies.

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Published
2023-05-26
How to Cite
Confidence, I., & Idumesaro, J. (2023). Working Capital Management as Determinant of the Performance of Publicly Listed Companies in Nigeria. Central Asian Journal of Innovations on Tourism Management and Finance, 4(5), 102-110. https://doi.org/10.17605/OSF.IO/3BWX7
Issue
Vol 4 No 5 (2023): May 2023
Section
Articles
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