Promising investments with a high rate of return and companies failed in distress due to insufficient working capital and this has led to employees being laid off from work which has increased the rate of unemployment in Nigeria. Therefore, this study seeks to understand the effect working capital management has on the financial performance of listed healthcare firms in Lagos, Nigeria. The study adopted the ex-post facto research through the use of published financial statements of the 10 listed companies. The sample of the study is 100 data points and were analysed using Vector Error Correction Model to determine the effect of working capital management on financial performance. The study revealed a negative and significant relationship between working capital management and financial performance based on the selected proxies. Therefore, the study recommended that financial managers of the listed companies should reduce the working capital to improve their financial performance.
Keywords: Financial Performance, Lagos, Nigeria, healthcare companies, working capital management
