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

Aminu, Yusuf (2014) Impact of working capital management on the profitability of manufacturing companies listed on the Nigerian Stock Exchange. PhD. thesis, Universiti Utara Malaysia.

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Abstract

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

Item Type: Thesis (PhD.)
Uncontrolled Keywords: Working capital management, Nigerian Stock Exchange, profitability, Nigeria.
Subjects: H Social Sciences > HG Finance
Divisions: Othman Yeop Abdullah Graduate School of Business
Depositing User: Mr. Badrulsaman Hamid
Date Deposited: 29 Dec 2015 06:18
Last Modified: 14 Apr 2016 02:59
URI: http://etd.uum.edu.my/id/eprint/5347

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