IDEAS home Printed from https://ideas.repec.org/a/ris/amjoms/0068.html
   My bibliography  Save this article

Working Capital Management and Profitability of Selected Quoted Fast Moving Consumer Goods Manufacturing Firms in South-west Nigeria

Author

Listed:

Abstract

This research work focused on the working capital management and profitability of selected quoted fast moving consumer goods manufacturing firms in South-west Nigeria. It examined the effect of inventory conversion period, inventory storage cost and cash management on profitability of the selected quoted fast moving consumer goods manufacturing firms. The population of this study consists of twenty one (21) listed fast moving consumer goods manufacturing firms quoted on the Nigeria Stock Exchange (NSE) in Southwest Nigeria between 2015 and 2020. The sample size consist of Eleven (11) viable fast moving consumer good manufacturing firms, which have available and quality data for the time period (convenience sampling technique). Regression analysis was used to analyse the result. The study revealed that cost of sales, inventory storage cost and cash management have negative correlation with Return on Asset, while inventory conversion period has a positive correlation with Return on Asset (ROA). The fixed effect model revealed that inventory storage cost had a positive significant effect on Return on asset at 0.05% level of significant and cost of sales had a negative significant effect on Return on asset. The fixed effect model also revealed that inventory storage cost had a positive insignificant effect on Return n asset, and cash management had a positive significant effect on return on asset. It was concluded that the level of a firm's profitability depends to a large extent on the efficiency and effectiveness of its working capital management. It is therefore recommended that firms should ensure proper management of their working capital elements, cost of sales, inventory storage cost, cash management and inventory conversion period) in order to maintain a satisfactory return on their assets.

Suggested Citation

  • Joshua Adewale , Adejuwon & Ayodele Adegbola, Aderibigbe, 2022. "Working Capital Management and Profitability of Selected Quoted Fast Moving Consumer Goods Manufacturing Firms in South-west Nigeria," Multidisciplinary Journal of Management Sciences, Association of Forensic Accounting Researchers (AFAR), vol. 4(3), pages 152-168, December.
    • Handle: RePEc:ris:amjoms:0068
    as

    Download full text from publisher

    File URL: https://www.afarng.org/wp-content/uploads/2023/01/Journal-of-Management-Science-Volume-4-Issue-3-December-2022_.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Barro, Robert J, 1979. "On the Determination of the Public Debt," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 940-971, October.
    2. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-927, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. A. Phiri, 2019. "Asymmetries in the revenue–expenditure nexus: new evidence from South Africa," Empirical Economics, Springer, vol. 56(5), pages 1515-1547, May.
    2. Gilles Saint‐Paul & Davide Ticchi & Andrea Vindigni, 2021. "Engineering crises: Favoritism and strategic fiscal indiscipline," Economics and Politics, Wiley Blackwell, vol. 33(3), pages 583-610, November.
    3. Ryo Arawatari & Tetsuo Ono, 2015. "Redistributive Politics And Government Debt In A Borrowing-Constrained Economy," Bulletin of Economic Research, Wiley Blackwell, vol. 67(1), pages 83-103, January.
    4. Solikin, Akhmad & Nizar, Muhammad Afdi, 2022. "Government Revenue and Government Spending Nexus: A Testing Hypothesis for Indonesia," MPRA Paper 118556, University Library of Munich, Germany.
    5. Lamino Abubakar , Hauwa & A. Andah, Ruth & Paul, Vincent, 2022. "Deriving an Ideal Entrepreneurial Ecosystem for Entrepreneurial Development Success in Nigeria," Multidisciplinary Journal of Management Sciences, Association of Forensic Accounting Researchers (AFAR), vol. 4(3), pages 219-245, December.
    6. Signe Krogstrup & Sébastien Wälti, 2011. "Women and Budget Deficits," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(3), pages 712-728, September.
    7. Casey B. Mulligan & Ricard Gil & Xavier Sala-i-Martin, 2004. "Do Democracies Have Different Public Policies than Nondemocracies?," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 51-74, Winter.
    8. Daniel E. Ingberman & Robert P. Inman, 1987. "The Political Economy of Fiscal Policy," NBER Working Papers 2405, National Bureau of Economic Research, Inc.
    9. repec:prg:jnlpep:v:preprint:id:697:p:1-15 is not listed on IDEAS
    10. Westerlund, Joakim & Mahdavi, Saeid & Firoozi, Fathali, 2011. "The tax-spending nexus: Evidence from a panel of US state-local governments," Economic Modelling, Elsevier, vol. 28(3), pages 885-890, May.
    11. Nadeem Iqbal & Wasim Shahid Malik, 2010. "Budget Balance: Through Revenue or Spending Adjustment: Evidence from Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 49(4), pages 611-630.
    12. Bayer, Ralph-C. & Oberhofer, Harald & Winner, Hannes, 2015. "The occurrence of tax amnesties: Theory and evidence," Journal of Public Economics, Elsevier, vol. 125(C), pages 70-82.
    13. Angbazo Andah PhD, Ruth, 2022. "Effect of Transformational Leadership Style on Job Performance in Nigerian Public Sector Organisations," Multidisciplinary Journal of Management Sciences, Association of Forensic Accounting Researchers (AFAR), vol. 4(3), pages 68-94, December.
    14. Francisco de Castro & José Manuel González-Páramo & Pablo Hernández de Cos, 2004. "Fiscal consolidation in Spain: dynamic interdependence of public spending and revenues," Investigaciones Economicas, Fundación SEPI, vol. 28(1), pages 193-207, January.
    15. Feld, Lars P & Kirchgassner, Gebhard, 2001. "Does Direct Democracy Reduce Public Debt? Evidence from Swiss Municipalities," Public Choice, Springer, vol. 109(3-4), pages 347-370, December.
    16. Gilles Saint-Paul, 2001. "The Dynamics of Exclusion and Fiscal Conservatism," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 4(2), pages 275-302, April.
    17. Mulligan Casey B & Gil Ricard & Sala-i-Martin Xavier X, 2010. "Social Security and Democracy," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-46, March.
    18. Abel L. Costa Fernandes & Paulo R. Mota, 2011. "The Roots of the Eurozone Sovereign Debt Crisis: PIGS vs Non-PIGS," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(5), pages 631-649, December.
    19. Gyasi, Genevieve, 2020. "The Impact of Fiscal Deficit on Economic Growth: Using the Bounds Test Approach in The Case of Morocco," MPRA Paper 98925, University Library of Munich, Germany.
    20. Persson, Torsten & Tabellini, Guido, 1999. "Political economics and macroeconomic policy," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 22, pages 1397-1482, Elsevier.
    21. Stiassny, Alfred & Koren, Stefan, 1994. "Tax and Spend or Spend and Tax? An International Study," Department of Economics Working Paper Series 28, WU Vienna University of Economics and Business.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:amjoms:0068. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Daniel Akanbi (email available below). General contact details of provider: https://edirc.repec.org/data/afarnea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.