Impact of Working Capital Management on the Performance of Manufacturing Firms in Nigeria

Abstract

This study examines the impact of working capital management on the performance of manufacturing firms (Beta Glass Nig. Plc). The primary objective was to examine the extent to which cash conversion cycle management affect return on asset (ROA) of manufacturing firms in Nigeria. The study runs from the period, 2010-2019.Ex-post facto research design method was used for data collection from annual financial report of Beta Glass Nigeria Plc. Data was collected from annual financial reports of Beta Glass Nigeria Plc. Multiple regression technique was used in analyzing the models with the help of E-view statistical package for testing the hypothesis. Return on Assets as a measure of performance was used as the dependent variable, cash conversion cycle was used as a measure of the independent variable, while size and growth were incorporated as control variables. The results showed that cash conversion cycle had a significant negative relationship with performance [ROA]. Based on the findings, the study recommends that firms should shorten the period between purchase of goods to pay for their purchases as to enhance profitability. They can also reduce the period between converting of raw materials into finished goods as to sell them.