AMAMIHE Journal of Applied Philosophy

This study examines how working capital management affects the financial performance of quoted consumer goods companies in Nigeria. Inefficient management of short term assets and liabilities can weaken firm profitability, yet Nigerian evidence on the separate roles of inventory, receivables, and payables management remains limited and inconsistent. The study specifically assesses the effects of inventory management, accounts receivable management, and accounts payable management on financial performance. It adopts an ex post facto research design using panel data drawn from the audited annual reports of ten quoted consumer goods companies listed on the Nigerian Exchange Group between 2016 and 2025. Inventory turnover, average collection period, and average payment period serve as proxies for working capital management, while return on assets measures financial performance. Data are analysed using descriptive statistics and fixed effects panel regression. The results show that inventory management has a positive and statistically significant effect on financial performance. Accounts receivable management has a negative and statistically significant effect, suggesting that longer collection periods reduce profitability. Accounts payable management has a negative but statistically insignificant effect. The study concludes that inventory and receivables management are the more critical drivers of profitability among quoted consumer goods companies in Nigeria. It recommends that firms adopt technology driven inventory control systems, strengthen credit management and debt recovery practices, and pursue a balanced approach to supplier payment that protects liquidity without damaging supplier relationships.

Open Full Text (PDF)