Operating Cash-Flow and Working Capital Management in Nigerian Industrial Sector

Abstract

This study titled ‘operating cash-flow and working capital management of Industrial Goods firms in Nigeria, seeks to ascertain the relationship between working capital management and operating cash flow of companies in the industrial sector of the economy. Variables examined were NWC_TA being the dependent variable and standing as a measure of working capital requirement, while operating cash-flow, firm size, return on assets and firm growth are independent variables and were obtained from Mechamestat data base on which multiple regression techniques were run as appropriate. Firm size, return on assets and firm growth were treated as control variables. The result suggests that firms’ size and firms’ growth are negative and insignificant in relation to working capital requirement, while return on assets was negative and significant. On the overall only operating cash-flow was positive and significant in relation to working capital requirement of the industry. The conclusion is that operating cash-flow is positive and highly significant in working capital requirement of the industry.