Working Capital Management And Firms’ Profitability In Emerging Markets: The Case Of Nigeria Listed Consumer Goods Companies
Keywords:Account Payable, Cash Conversion Circle, Working Capital, Operating Cycle, Return on Equity
Detrimental impact of various global financial crises on manufacturing enterprises' ability to meet their financial obligations as well as recover money from customers has rendered numerous businesses inoperable. This study examined working capital management and firms’ profitability in emerging market, Nigeria listed consumer goods companies for the period 2011-2021. Data were extracted from the financial statement of the sampled companies with the use of purposeful sampling technique. Using the GMM estimator technique, the finding revealed that account payable has positive and statistically significant effect on return on equity while cash conversion circle has negative and insignificant effect at 5% level of significant respectively. The study concluded that accounts payable was found to increase the likelihood of profitability. Therefore, governments should make efforts to provide adequate infrastructure, such as a constant and stable electricity supply, a good road network, and a rail system, to facilitate cost-effective production and the movement of goods.