EFFECT OF WORKING CAPITAL MANAGEMENT ON PERFORMANCE OF BASIC MATERIALS FIRMS IN NIGERIA

Abstract

This study analyzes the effect of working capital management on performance of basic materials firm in Nigeria between the period of 2014 - 2020. The specific objectives include: To determine the extent to which account receivables, inventory conversion period, operating efficiency and Stock availability have on firm performance in Nigeria. Four research questions were formulated in line with four objectives. Regression analysis method of data analysis was used. The variables used which were culled from the annual report of the quoted basic material firms. The study found that account receivables and inventory conversion period have no significant effect on firm performance in Nigeria, while operating efficiency has a positive and significant effect on firm performance in Nigeria. Based on these, the study recommends among others, that firm should diversify their inventory system to suit specific needs of production. Also, that firms should improve the operating management by reducing their account receivable period as this may reduce bad debt that result through credit sale and increase the cash available for investment.