Impact of Working Capital Management on Profitability of Manufacturing Companies

The study examined the impact of working capital management on organization performance. The objective of the study is to determine whether cash conversion cycle, inventory held in a number of days, accounts receivable and trade and other payables have impact on the profitability of Nigeria petroleum retail firms in Nigeria. Data was sourced from secondary source using times series data on Return on Assets, Account Receivable, Inventory Held, trade and other Payable and Cash Conversion Cycle were used to determine the relationship between working capital management and profitability of MRS Oil and Gas Plc and Guinness Plc respectively. Results revealed that accounts receivable, inventory held, cash conversion cycle and trade and other payables has significant impact on the profitability of MRS Oil and Gas plc and Guinness Plc respectively. Based on findings the study recommended that future research should be done to include a wider number of petroleum retail firms from similar African contexts to provide a more generalizable findings and compare the result with that found in this study; that the measurement of profitability in this study was Return on Asset (ROA) which means that management should take every working variables as significant since their combined effort are needed; that research should be done to find out the impact of Working Capital Management on other measures of profitability such as Return on Equity (ROE) firm growth and net trade cycle; and that accountants should employed to maintain the account and financial activities of the companies.