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Cited by 29Working Capital and Financial PerformanceSupply Chain and Inventory ManagementFinancial Analysis and Corporate Governance

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Working Capital Management and Firms’ Profitability: Evidence from Quoted Firms on the Nigerian Stock Exchange

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Olaoye, F. O., Adekanbi, J. A., Oluwadare, O. E.·2019·Intelligent Information Management
DOI 10.4236/iim.2019.113005
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Abstract

Over the years, it appeared that firms failed to subject short-term investments to proper management thereby leading to either excessive or inadequate working capital which in turn affected their profitability. To empirically satisfy this, this paper examined working capital management and firms’ profitability in Nigeria quoted firms on Nigerian Stock Exchange (NSE). A panel data methodology was used with different regression estimators to analyze this relationship based on a balanced panel of 10 listed firms during the period 2008-2017. It was discovered that cash collection period and cash payment period exerted a negative impact on return on assets, though the impact was only significant for cash payment period on the ground of −0.064 (p = 0.000 −0.032 (p = 0.077 > 0.05). Also discovered was that both the current ratio and inventory period exerted a positive impact on return on assets, though the impact was only significant for current ratio on the ground of 8.172 (p = 0.000 0.05). The study concluded that working capital management affected firms’ profitability in Nigeria. Therefore it was recommended that while the shorter collection was maintained, payment to creditors should not be elongated so as to enjoy cash discount (if any) and that firms should be proactive in the management of raw materials in order to avoid idle resources that might negatively impact their financial performance.

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Research works printed but not linked: 29

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Metadata

Authors
Olaoye, F. O., Adekanbi, J. A., & Oluwadare, O. E.
Affiliations
Ekiti State University (NG)
ORCID
Venue
Intelligent Information Management
Publisher
Scientific Research Publishing, Inc.
Published
2019
Volume
11
Issue
03
Pages
43-60
ISSN
  • 2150-8208 (ISSN-L)
  • 2160-5912
  • 2160-5920
DOI
10.4236/iim.2019.113005
OpenAlex
W2944963593
Cited by
29
References
0
Citations by year
2025: 1 · 2024: 9 · 2023: 7 · 2022: 8 · 2021: 2 · 2020: 2
FWCI
7.65
Type
journal article
Language
en
Open access
Licence
Locations
Intelligent Information Management (publishedVersion, cc-by)
Topics
  • Social Sciences › Business, Management and Accounting › Accounting › Working Capital and Financial Performance
  • Social Sciences › Decision Sciences › Management Science and Operations Research › Supply Chain and Inventory Management
  • Social Sciences › Business, Management and Accounting › Accounting › Financial Analysis and Corporate Governance
Keywords
working capital management, firm profitability, return on assets, current ratio, inventory period, listed companies, Nigerian Stock Exchange

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CoChat. (2026). Citation check: Working Capital Management and Firms’ Profitability: Evidence from Quoted Firms on the Nigerian Stock Exchange. https://app.cochat.ai/papers/10.4236/iim.2019.113005
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Olaoye, F. O., Adekanbi, J. A., & Oluwadare, O. E. (2019). Working Capital Management and Firms’ Profitability: Evidence from Quoted Firms on the Nigerian Stock Exchange. Intelligent Information Management. https://doi.org/10.4236/iim.2019.113005