The Effects of Working Capital Management on Corporate Profitability: Evidence from Nigerian Food and Beverages Industry

Authors

  • Jamilu Madaki Department of Accounting, Faculty of Management Sciences, Federal University Dutse, Ibrahim Aliyu By-pass P.M.B 7156, Dutse Jigawa State
  • Igodo Eze Ogbonnaya Department of Accountancy, College of Business and Management studies, Jigawa State Polytechnic Dutse, Jigawa State.

Keywords:

Working Capital, Corporate Profitability, Food Product Firms, Nigeria

Abstract

This paper examines the effect of working capital management on corporate profitability for the period 2009 to 2013. A sample of nine firms listed on the floor of the Nigerian Stock Exchange was studied. The study made use of secondary data generated from annual reports and accounts of the sampled companies and the Nigerian Stock Exchange Fact book. The data were analyzed by means of descriptive statistics and GLS regression analysis using STATA 12. The study finds a positive relationship between Average Collection Period (ACP), Current Ratio (CR) and the size of the firm (LOGSIZE) with Profitability and a negative relationship with Inventory Turnover Period (ITP), Average Payment Period (APP). The paper therefore recommends that cash collected should be re-invested into short term investment to generate profits and fund left idle in the cash or excessive liquidity is costly and do
not lead to profitability.

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Published

2019-12-31

How to Cite

Madaki, . . J. ., & Ogbonnaya, I. . E. (2019). The Effects of Working Capital Management on Corporate Profitability: Evidence from Nigerian Food and Beverages Industry . International Journal of Intellectual Discourse, 2(2). Retrieved from https://www.ijidjournal.org/index.php/ijid/article/view/739

Issue

Vol. 2 No. 2 (2019): December

Section

Articles