Working Capital Management and Performance of Listed Manufacturing Companies in Nigeria

The cash conversion cycle theory was applied to examine how working capital management impact on financial performance of Nigerian listed manufacturing firms from 2010-2022. Secondary series were gathered from the annual reports of 25 manufacturing firms. At the 5% level, the panel unit root, Kao and Pedroni cointegration; and Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS)were tested. The Panel unit root test shows that all variables were integrated at order one. The Kao and Pedroni cointegration verified the existence of long-run form. The average collection period, cash conversion cycle, and average payment period are all negative and insignificant.The inventory turnover ratio is positive and insignificant; and only the Dynamic Ordinary Least Squaresshow that firm size is positive and significant. In conclusion,publicly traded manufacturing firms employ conservative working capital management techniques. Thus, publicly traded manufacturing firms should avoid carrying excessive inventories, but instead make adequate forecasts and plans for seasonal variations, as well as employ a more liberal credit term to encourage more sales such as the use of quantity and prompt discount payment system.