Working Capital Management And The Performance Of Quoted Manufacturing Firms In Nigeria (A Study Of Nigerian Breweries Plc.)

Adindu Gideon okechukwu | 82 pages (15990 words) | Projects

ABSTRACT

The study examined the effect of working capital management on the performance of quoted manufacturing firms in Nigeria.The specific objectives of the study are: to examine  the effect of receivable collection period on the  return on capital employed of quoted manufacturing firms inNigeria, to determine  the effect of payables  payment  period  on   the  return  on  capital  employed  of  quoted manufacturing firms  in  Nigeria, to ascertain the relationship between cash conversion cycle and return on capital employed of quoted manufacturing firms in Nigeria.To achieve the objectives of the study,ex-post facto research design was adopted.The researcher made use of secondary data. Intesting the hypotheses, regression analysis was used. The  result of the study was obtained using regression analysis and thefinding shows that  working capital management, measured interms  of Receivables collectionperiod (RCP),Payables Payment Period(PPP) and Cash Conversion Cycle(CCC),has significant effecton performance of quoted firms. It is concluded that managers can increase performance   by putting  in place short Receivables Collection Period, Long Payables Payment Period and Short Cash Conversion Cycle.


TABLE OFCONTENTS

CHAPTERONE: INTRODUCTION

1.1    Background oftheStudy1

1.2    Statement ofProblem                                                                                     3

1.3    Objectives ofStudy4

1.4    Research Questions                                                                                        5

1.5    Research Hypothesis5

1.6      Significance ofStudy                                                                                    6

1.7    ScopeofStudy7



CHAPTERTWO:REVIEWOFRELATEDLITERATURE

2.1Conceptual Framework                                                                                  9

2.1.1 Grossworking capital: (TotalCurrentAssets)                                           11

2.1.2 Networking capital: (totalcurrentassets-total  current liabilities)        11

2.2     Importance ofworking capital13

2.3Financing current assets                                                                                16

2.4    Determinants ofworking capitalrequirement17

2.5    Management ofworking capital                                                                  25

2.5.1 Measures ofworking capitalmanagement                                                  27

2.5.2Importance ofworking capitalmanagement                                               30

2.5.3Working capitalmanagement approaches                                                   32

2.5.3.1 Conservative approach33

2.6.3.2  Aggressive approach                                                                                  33

2.5.3.3Hedging approach34

2.6Corporate financial performance                                                                  35

2.6.1 Measures ofcorporate financial performance                                             35

2.6.1.1ReturnonSales(ROS)                                                                               36

2.6.1.2ReturnonCapitalEmployed (ROCE)37

2.6.1.3ReturnonInvestment (ROI)                                                                      38

2.6.1.4ReturnonEquity (ROE)38

2.6.1.5ReturnonAssets(ROA)                                                                            39

2.7       Relationship between working capitalmanagement

approaches andfinancialperformance                                                      40

2.8       Liquidity versusprofitability:risk-return tradeoff                              41

2.9Theoretical Framework42

2.9.1Agency costoffreecashflowtheory                                                        42

2.9.2Trade-offModel43

2.9.3     Keynesian liquidity preference theory                                                      44

2.9.4   Theories ofPerformance44

2.9.4.l Clark's Profitability Theory                                                                        45

2.9.4.2Schumpeter's  Profitability Theory47

2.10      Review ofEmpirical Studies                                                                      49

2.11    Research Gap56



CHAPTERTHREE:METHODOLOGY 

Research Design57

AreaofStudy                                                                                                   57

Population andSample ofStudy58

SourcesofData                                                                                              58

Description ofResearch Variable58

Receivables Collection Period (RCP)                                                         59

Payables Payment Period (PPP)59

CashConversion Cycle(CCC)                                                                    60

Method ofDataAnalysis61

Model Specification                                                                                         61 



CHAPTERFOUR:  DATA PRESENTATION,ANALYSIS  AND DISCUSSION

4.1DataPresentation                                                                                            63

4.2DataAnalysis63

 4.3  TestofHypothesis                                                                                  66

4.3.1TestofHypothesisOne                                                                          66

4.3.2TestofHypothesisTwo                                                                          67

4.3.3TestofHypothesisThree67



CHAPTERFIVE:SUMMARY,CONCLUSIONAND RECOMMENDATIONS

5.1Summary                                                                                                 68

5.2  Conclusion                                                                                              68

5.3Recommendations                                                                                  69

References70


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APA

ADINDU, O (2021). Working Capital Management And The Performance Of Quoted Manufacturing Firms In Nigeria (A Study Of Nigerian Breweries Plc.). Mouau.afribary.org: Retrieved Oct 30, 2024, from https://repository.mouau.edu.ng/work/view/working-capital-management-and-the-performance-of-quoted-manufacturing-firms-in-nigeria-a-study-of-nigerian-breweries-plc-7-2

MLA 8th

OKECHUKWU, ADINDU. "Working Capital Management And The Performance Of Quoted Manufacturing Firms In Nigeria (A Study Of Nigerian Breweries Plc.)" Mouau.afribary.org. Mouau.afribary.org, 15 Feb. 2021, https://repository.mouau.edu.ng/work/view/working-capital-management-and-the-performance-of-quoted-manufacturing-firms-in-nigeria-a-study-of-nigerian-breweries-plc-7-2. Accessed 30 Oct. 2024.

MLA7

OKECHUKWU, ADINDU. "Working Capital Management And The Performance Of Quoted Manufacturing Firms In Nigeria (A Study Of Nigerian Breweries Plc.)". Mouau.afribary.org, Mouau.afribary.org, 15 Feb. 2021. Web. 30 Oct. 2024. < https://repository.mouau.edu.ng/work/view/working-capital-management-and-the-performance-of-quoted-manufacturing-firms-in-nigeria-a-study-of-nigerian-breweries-plc-7-2 >.

Chicago

OKECHUKWU, ADINDU. "Working Capital Management And The Performance Of Quoted Manufacturing Firms In Nigeria (A Study Of Nigerian Breweries Plc.)" Mouau.afribary.org (2021). Accessed 30 Oct. 2024. https://repository.mouau.edu.ng/work/view/working-capital-management-and-the-performance-of-quoted-manufacturing-firms-in-nigeria-a-study-of-nigerian-breweries-plc-7-2

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