Working Capital Management Firm Liquidity and Stock Market Seasonality: Evidence from Nigeria (Published)
This study examines the relationship between Working Capital Management Firm Liquidity and Stock Market Seasonality among quoted firms in Nigeria. Six hypotheses were formulated following the dependent variable of Stock Market Liquidity. The independent variables employed for this study include: Liquidity Ratio, Account Payable Day, Account Receivable Day, Inventory Day, Firm Leverage and Firm Size. This study is based on ex-post facto research design and employed a panel data set collected Fifty (50) non-financial companies over an eight year period ranging from 2011 to 2018 financial year. We analyzed the data set using descriptive statistics, correlation and Panel Ordinary Least Square Regression Analysis. Our finding lends credence to the efficient market theory which holds that share markets prices are unpredictable and as such cannot be forecasted. Specifically, the finding suggests that market liquidity cannot predict stock market returns irrespective of the season of the year. Hence, we carefully hold that the stock market in Nigeria is efficient due to its randomness and will rapidly respond to any information or anomalies presented to it. The study recommends among others that policy makers in emerging markets such as Nigeria should ease entry barriers for prospective firms so as to enhance liquidity. The study further recommends that, proper inventory management system should be put in place in order to avoid working capital mismanagement.
Impact of Working Capital Management on Firm’s Profitability: A Case from Food Sector of Pakistan (Published)
The main aim of this study is to investigate the relationship between working capital management (WCM) and firm’s profitability in the Food sector of Pakistan. WCM plays an important role in firm’s financial management decisions. An optimal (WCM) is expected to contribute positively to the creation of firm’s value and enhancement of its profitability. Return on assets (ROA) is used as dependent variable while different independent variables are also used. Working capital, current asset to total asset ratios’ debt to equity ratio, current ratio and capital size of the firm are used independent variables. These variables are also used to investigate their effect on profitability (net income). A sample size of 5 major food companies in Pakistan has been selected from balance sheet analysis of state bank of Pakistan for a period of five years, from 2012 to 2016. The relationship between (WCM) efficiency and profitability is examined using correlation, regression analyses. The results show a strong positive significant relationship between (WCM) and firm’s profitability in Pakistan’s Food sector.
Assessing the Impact of Liquidity and Profitability Ratios on Growth of Profits in Pharmaceutical Firms in Nigeri (Published)
This paper assesses the impact of liquidity and profitability ratios on growth of profits in Pharmaceutical firms in Nigeria. Eight ratios: acid test, current ratio, net working Capital. Return on assets, returns on capital employed, returns on equity, gross profit ratio and net profit ratio were regressed against the dependent variable growth of profit. Haussmann test was conducted to choose between Fixed Effect and Random Effects model. Results justified the use of Fixed Effect model. Test results indicate significant contributions of all the variables to profit growth of pharmaceutical companies in Nigeria implying that continued improvement in the variables can lead to increases in growth of profit by the Pharmaceutical firms.