Responsiveness of Operational Performance to Liquid Asset Management of Industrial Goods Firms in Nigeria (Published)
The study examined the responsiveness of operational performance to liquid asset management of industrial goods firms in Nigeria. inventory, cash and cash equivalents, and account receivables formed the independent variables of the study. While profit for the year was used to measure operational performance. The study adopted an ex-post-facto research design, covering the period between 2011 and 2020. Secondary data were extracted from annual reports and accounts of sampled industrial goods firms listed on Nigeria Exchange Plc. Multiple regression techniques (fixed-effect model) was used for the data analysis. In line with the specific objectives of the study which was to ascertain the effect of inventory, cash and cash equivalents, and account receivables on profit for the year of industrial goods firms in Nigeria, it was revealed that inventory and cash and cash equivalents have a negative and significant effect on profit for the year of industrial goods firms in Nigeria. Account receivables have a positive and insignificant effect on profit for the year of industrial goods firms in Nigeria. This implies that non of the independent variables have a significant effect on the operational performance of industrial goods firms in Nigeria. It is recommended therefore that industrial goods firms should strive to reduce the rate at which they sell their inventory at a loss. They should devise a means to resist sell pressures caused by importations. The government should also help in protecting the firms within these industries by placing importation embargos on industrial goods. Industrial goods firms should reduce the amount of cash and cash equivalents they hold. They should strive to reduce the idle cash at their disposal. Such cash should be invested into the business that will yield good returns. They should always strive to increase their account receivables because of the positive effect it has on operational performance.
Citation: Mbah, A. U & Okwo I M. (2022) Responsiveness of Operational Performance to Liquid Asset Management of Industrial Goods Firms in Nigeria, European Journal of Accounting, Auditing and Finance Research, Vol.10, No. 12, pp.14-28
Keywords: Inventory., Nigeria, Profit for the year, account receivables, cash and cash equivalents
IMPACT OF WORKING CAPITAL ON THE PROFITABILITY OF THE NIGERIAN CEMENT INDUSTRY (Published)
This study empirically examined the impact of working capital management (Measured by: the number of days accounts receivable are outstanding-DAR, the number of days inventory are held-DINV, and the cash conversion cycle-CCC), on profitability (measured by return on assets-ROA) of Nigerian Cement Industry for a period of eight (8) years (2002-2009). Data from a sample of four (4) out of the five (5) cement companies quoted on the Nigerian Stock Exchange (NSE) were analysed using descriptive statistics and multiple regression analysis. The study found an insignificant negative relationship between the profitability (measured by ROA) of cement companies quoted on the NSE and the number of days accounts receivable are outstanding (DAR). The study also found a significant negative relationship between the profitability of these cement companies and the number of days inventory are held (DINV). The study finally revealed a significant positive relationship between the profitability and the cash conversion cycle (CCC). The study concludes that, the profitability of cement companies quoted on the NSE during the study period is influenced by DINV and CCC. The study therefore recommends that managers of these cement companies should manage their working capital in more efficient ways by reducing the number of days inventory are held to an optimal level in order to enhance their profitability as well as create value for their shareholders. Managers of Nigerian cement companies should also improve on their cash flows, through the reduction of their cash conversion cycle
Keywords: Accounts receivable, Cash conversion cycle, Inventory., Nigerian Cement Industry, Profitability, Working Capital Management
Impact of working capital on the profitability of the Nigerian cement industry (Review Completed - Accepted)
This study empirically examined the impact of working capital management (Measured by: the number of days accounts receivable are outstanding-DAR, the number of days inventory are held-DINV, and the cash conversion cycle-CCC), on profitability (measured by return on assets-ROA) of Nigerian Cement Industry for a period of eight (8) years (2002-2009). Data from a sample of four (4) out of the five (5) cement companies quoted on the Nigerian Stock Exchange (NSE) were analysed using descriptive statistics and multiple regression analysis. The study found an insignificant negative relationship between the profitability (measured by ROA) of cement companies quoted on the NSE and the number of days accounts receivable are outstanding (DAR). The study also found a significant negative relationship between the profitability of these cement companies and the number of days inventory are held (DINV). The study finally revealed a significant positive relationship between the profitability and the cash conversion cycle (CCC). The study concludes that, the profitability of cement companies quoted on the NSE during the study period is influenced by DINV and CCC. The study therefore recommends that managers of these cement companies should manage their working capital in more efficient ways by reducing the number of days inventory are held to an optimal level in order to enhance their profitability as well as create value for their shareholders. Managers of Nigerian cement companies should also improve on their cash flows, through the reduction of their cash conversion cycle
Keywords: Accounts receivable, Cash conversion cycle, Inventory., Nigerian Cement Industry, Profitability, Working Capital Management