ABSTRACT
Working capital is the capital of a business which is used
in its day-to-day trading operations, calculated as the difference between
current asset and current liabilities. Working capital management involves the
application of strategies and policies in the use of firm 's current assets and
liabilities in such a way that an optimum level of working capital is
maintained In essence, the goal of working capital management is to promote a
satisJ1ing profitability and maximizes shareholders' value. The study analysed
the effect of working capital management on the performance of manufacturing
companies in Nigeria, to tackle the problem of using wrong method in measuring
working capital, overcapitalization or undercapitalization of stock and
neglecting of operating cycle by examining the extent to which working capital
affect return on asset, return on equity and net profit margin. Regression
analyses was carried out on the data to determine relationships between working
capital management and return on asset, return on equity and net profit margin.
The study established that CA/TA and CL/TA both has relationship with return on
equity, CL/TA has a significant relationship with return on assets while ('A/TA
has no significant relationship with return on assets, CA/TA has a significant
relationship with net profit margin while CL/TA has no significant relationship
with net profit margin. The study recommends that the manufacturing firms
should manage their working capital efficiently to achieve optimal
profitability. This can be achieved by improving the inventory control process,
collecting receivables in line with the agreed credit terms and by delaying
payments to suppliers. All these will lead to shortening the cash conversion
cycle resulting to an increase in profitability. It is also recommended that
there should be proper inventory management system to avoid over stock of
inventory. Manufacturing firms should engage in relationship with those
suppliers who allow long credit time period and those customers who will take
short payment period
NWOSU, A (2021). Effect Of Working Capital Management On Financial Performance Of Brewery Companies In Nigeria (A Study Of Nigeria Brewery Plc). Mouau.afribary.org: Retrieved Nov 27, 2024, from https://repository.mouau.edu.ng/work/view/effect-of-working-capital-management-on-financial-performance-of-brewery-companies-in-nigeria-a-study-of-nigeria-brewery-plc-7-2
AMARACHI, NWOSU. "Effect Of Working Capital Management On Financial Performance Of Brewery Companies In Nigeria (A Study Of Nigeria Brewery Plc)" Mouau.afribary.org. Mouau.afribary.org, 15 Jul. 2021, https://repository.mouau.edu.ng/work/view/effect-of-working-capital-management-on-financial-performance-of-brewery-companies-in-nigeria-a-study-of-nigeria-brewery-plc-7-2. Accessed 27 Nov. 2024.
AMARACHI, NWOSU. "Effect Of Working Capital Management On Financial Performance Of Brewery Companies In Nigeria (A Study Of Nigeria Brewery Plc)". Mouau.afribary.org, Mouau.afribary.org, 15 Jul. 2021. Web. 27 Nov. 2024. < https://repository.mouau.edu.ng/work/view/effect-of-working-capital-management-on-financial-performance-of-brewery-companies-in-nigeria-a-study-of-nigeria-brewery-plc-7-2 >.
AMARACHI, NWOSU. "Effect Of Working Capital Management On Financial Performance Of Brewery Companies In Nigeria (A Study Of Nigeria Brewery Plc)" Mouau.afribary.org (2021). Accessed 27 Nov. 2024. https://repository.mouau.edu.ng/work/view/effect-of-working-capital-management-on-financial-performance-of-brewery-companies-in-nigeria-a-study-of-nigeria-brewery-plc-7-2