ABSTRACT

Inventory occupies a criticalpart ofassets in manufacturing companies as it affects their financial performance. The study evaluated the impact of inventory management on financial performance oflisted manufacturingfirms in Nigeria. It employed ex-post facto research design and extracted data from annual report of Guinness Nigeria Pic and Nigeria breweries Pic listed brewingfirmsfor the period 2012 to 2018. The study engaged inventory turnover ratio as proxiesfor inventory management while return on assets, return on equity and net profit margin was engaged asfinancial performance proxies. The study engaged panel unit root test which established that the variables are stationary at 5% level ofsignificant and are all integrated at level. It therefore used panel data regression analysis to analyze the data. The findings ofthe research revealed that inventory management has positive significant relationship with netprofit margin, return on equity while it has positive insignificant relationship with return on assets. The study therefore concludes that inventory management has significant effect on financial performance oflisted manufacturingfirms in Nigeria. It therefore recommends that management ofmanufacturingfirm should ensure an appropriate level ofinventory to guarantee continued operation and minimal cost to enhance profit. Management should ensure that they maximize returns to shareholders by anticipating sufficient turnover through increase in inventory turnover.