WORKING CAPITAL MANAGEMENT AND FINANCIAL PERFORMANCE OF LISTED AGRICULTURAL FIRMS IN NIGERIA
Between 2014 and 2023, this research looks at the financial performance of publicly listed agricultural enterprises in Nigeria and how their working capital is managed. The study uses a random effects model to examine the influence of working capital management components on profitability, as measured by return on assets (ROA), using panel data from 15 enterprises over a 10-year period (2011-2020). Some of the independent variables include the following: firm size, working capital investment policy, accounts receivable period, accounts payable period, current ratio, debt-to-total asset ratio, and inventory conversion period. With a current ratio of 1.21 suggesting adequate liquidity, descriptive data reveal that, on average, enterprises require 194 days to turn inventory into sales and 808 days to collect receivables. Although there is a modest positive link between ACPP and profitability, correlation research shows that ROA is negatively correlated with INVCP and ACRVP. According to the random effects model, WCIP has a marginally beneficial influence on profitability, but ACRVP and INVCP have a negative but statistically insignificant effect. The findings indicate that although working capital management does affect profitability, the relative importance of its components varies. These results show that, especially in developing nations like Nigeria, effective management of working capital is critical to increasing profits. Managers should optimize working capital components to increase business performance, according to the study, which adds to the current literature and offers sector-specific insights.
Keywords: Working Capital Management, Profitability, Agricultural Companies, ROA.
