Effect Of Inventory Management On The Financial Performance Of Brewries Companies In Nigeria:- Okala ifeoma F

ABSTRACT

This study examined the effect of inventory management on the financial performance of brewery companies in Nigeria. The study made use ofex-postfacto research design and data collected from secondary source were analyzed using ordinary least square technique. The results revealed that inventory management has a significant effect on the financial performance (proxy by ROA, ROE and PM) of breweries companies in Nigeria. The study concluded that inventory management is essential in the operation ofany business. Inventory as an asset in the balance sheet of companies has taken on increased importance because many companies are applying the strategic of reducing their investment in non-current assets, like plants, warehouses, equipment and machinery, and so on, which even highlight the significance ofreducing inventory. The study ofinventory management in brewery industry for the respective period (2014- 2018) leads to the conclusion that inventory performance was satisfactory. Return on Assets, Firm Growth and Return on Asset are positively correlated with the inventory conversion. The study recommended that Breweryfirms should develop a policy framework to facilitate faster implementation of the best inventory management practices such as, Just in Time in order to enhance the return on assets ofsuch firms. Brewery firm, should consider investing modern technology implement Electronic Data Interchange EDI). This will reduce inventory costs and improve returns, thereby improving the growth of firm. Since ICP has a positive and none significant relationship with ROE, it is recommend that top managements should emphasis on the proper inventory management techniques and measuring of efficiency deviations to identify weaknesses in the process of managing inventories.