Impact of Working Capital Management on the Profitability of Manufacturing Companies in Nigeria

The study investigated the impact of Working Capital Management on the profitability of manufacturing Companies in Nigeria. The population of the study is made up of the twenty one (21) listed manufacturing companies on the Nigerian Exchange group. The study involved a sample of 5 companies, the data for all the variables of the study were extracted from the financial statements of the 5 sampled firms listed on the Nigerian Exchange group for the period of 10 years (2013-2022). The specific objective of the study is to ascertain the effects of current ratio on return on equity of manufacturing company in Nigeria. Secondary source and panel data were used to generate inferences for the study. Three hypotheses were formulated and tested. The result of the study reveals that the regression analysis shows that the chosen variables (ART, APR, CCC, ROE, CR,) do not significantly explain variations in ROA. Based on the study the recommendation was to optimize cash conversion cycles (CCC), evaluate and streamline the CCC by reducing the time it takes to convert raw materials into finished goods, sell the goods, and collect cash from customers. The conclusion was made that the research on working capital management (WCM) and financial performance in manufacturing company provides valuable insights into the relationship between these two variables. The findings suggest that effective WCM positively influences financial performance by improving profitability, enhancing liquidity, and increasing operational efficiency