ABSTRACT
Without a doubt, the ultimate
objective of any firm is to maximize profit. However, it is the various
components of working capital and its efficient management that helps to
preserve liquidity, maintain efficient and effective allocation ofresources and
maximize financial performance. This study was carried out to determine the
effect of working capital management on the performance of some quoted firms in
Nigeria with specflcobjectives to establish the effect of working capital
management measured by Gross Working Capital (GWC) and Net Working Capital
(NWC) on the Return on equity (ROE) and Return on asset (ROA) in a 2 model
structure. The study made use of the ex-post factor research design and
extracted data from annual reports offive (5) quoted firms selected from the
Nigerian Stock Exchange from 2010-2016. Employing the panel least square
multiple reess ion model in a data set of thirty-five (35) observations, the
result showed that working capital management has significant predictive
ability on both measures of performance, ROE and ROA; GWC has a sign ?fIcant
negative influence on ROE and also on ROA while NWC exerts a significant
positive influence on ROE but an ins ignflcant positive influence on ROA at 5%
level of probability. The study concluded that working capital management has a
sign flcant effect on financial performance of quotedfirms in Nigeria through
its effect on profitability which represents a standard criterion to appraise
the performance of a firm. The study therefore recommended that management of
firms should maintain or increase the profitability and performance of their
companies and shareholders by keeping its Gross working capital and its Net
working capital to a possible optimal level. Gross working capital can be
optimized through reducing excess cash or idle funds by investing them in
evaluated profitable projects or more yielding fixed assets.
UGOCHUKWU, J (2021). Effect Of Working Capital Management On Performance Of Some Quote1) Firms In Nigeria . Mouau.afribary.org: Retrieved Nov 01, 2024, from https://repository.mouau.edu.ng/work/view/effect-of-working-capital-management-on-performance-of-some-quote1-firms-in-nigeria-7-2
JAMIKE, UGOCHUKWU. "Effect Of Working Capital Management On Performance Of Some Quote1) Firms In Nigeria " Mouau.afribary.org. Mouau.afribary.org, 14 Jul. 2021, https://repository.mouau.edu.ng/work/view/effect-of-working-capital-management-on-performance-of-some-quote1-firms-in-nigeria-7-2. Accessed 01 Nov. 2024.
JAMIKE, UGOCHUKWU. "Effect Of Working Capital Management On Performance Of Some Quote1) Firms In Nigeria ". Mouau.afribary.org, Mouau.afribary.org, 14 Jul. 2021. Web. 01 Nov. 2024. < https://repository.mouau.edu.ng/work/view/effect-of-working-capital-management-on-performance-of-some-quote1-firms-in-nigeria-7-2 >.
JAMIKE, UGOCHUKWU. "Effect Of Working Capital Management On Performance Of Some Quote1) Firms In Nigeria " Mouau.afribary.org (2021). Accessed 01 Nov. 2024. https://repository.mouau.edu.ng/work/view/effect-of-working-capital-management-on-performance-of-some-quote1-firms-in-nigeria-7-2