Current Assets Management and Operational Performance of Consumer Goods Firms in Nigeria (Published)
The study examined the effect of current assets management on the operational performance of firms in the consumer goods Industry in Nigeria. Specifically, the study ascertained the effect of inventory turnover, accounts receivable turnover, and cash conversion cycle on the turnover of consumer goods firms in Nigeria. The study adopted an ex-post-facto research design, covering a ten-year period (2013 to 2022). Secondary data were extracted from the annual reports and accounts of sampled FMCGs in Nigeria. Multiple regression techniques were used for test of hypotheses. The findings of the study reveal several important insights. Firstly, the analysis indicates a statistically significant negative relationship between inventory turnover and the turnover of FMCG firms in Nigeria. This is evident from the t-statistic of -2.269713 and a corresponding p-value of 0.0255. Secondly, in contrast, the study shows that accounts receivable turnover has a statistically non-significant negative impact on the turnover of FMCG firms in Nigeria. This is evidenced by a t-statistic of -0.406028 and a p-value of 0.6856. Lastly, the research demonstrates a statistically significant effect of the cash conversion cycle on the turnover of FMCG firms in Nigeria. This is supported by a t-statistic of -3.299741 and a p-value of 0.0014. The findings of the study lead to several recommendations for FMCG firms in Nigeria. Firstly, it is advised that firms enhance their demand forecasting techniques and adopt agile replenishment strategies to align with market trends and consumer preferences. Leveraging technology and data analytics can optimize inventory levels, mitigating overstocking and stockouts. Secondly, firms should tailor credit terms based on customer credit profiles, establish clear credit policies, and implement effective collections processes supported by technology. Lastly, it’s recommended that firms conduct a comprehensive analysis of their operational cycle, collaborate closely with suppliers, and integrate technology to streamline processes.
Keywords: Cash conversion cycle, Current Asset Management, accounts receivable turnover, inventory turnover