The objective of the study was to analyze the impact of working capital management on manufacturing companies in Nigeria for 5-years period (2010-2014). This is essential because the financial health of all businesses, irrespective of type and size depends on efficient management of working capital. In an effort to achieve the broad objective of this study, three hypotheses were raised in the study for validation and a sample of Larfage Wapco Plc, Dangote Cement Plc and Cement Co. of North. Nigeria Plc was used in the study. Data was collected from the annual report and statements of account of the two banks sampled in the study covering the period of 2010 to 2014. The multiple regression method of analysis was adopted and the result was facilitated using the statistical package for social and management sciences (SPSS 20.0). In the model cash ratio (CR) proxy for liquidity, the ratio of current assets to total assets (TCATAR) and the ratio of current liabilities to total assets (CLTAR) were the independent variables, while return on assets (ROA) proxy for bank’s profitability was the dependent variable. The result of the analysis at 5% level of significance shows clearly that, banks’ liquidity (CR) does not have a significant relationship with profitability (ROA). In addition, there is a positive but insignificant relationship between profitability and the ratio of current asset to total asset and the ratio of current liabilities to total assets does not have a significant relationship with profitability. Among others, the study recommends that firms should not solely concentrate on the profit maximization strategies but should also adopt measures that will ensure effective working capital management.
TABLE OF CONTENTS
CHAPTER ONE – INTRODUCTION
1.1 Background of the Study
1.2 Statement of the Problem
1.3 Objectives of the Study
1.4 Research Questions
1.5 Research Hypothesis
1.6 Scope of the Study
1.7 Justification of the Study
1.8 Operational Definition of Terms
CHAPTER TWO – LITERATURE REVIEW
2.1 Conceptual Review
2.1.2. Working Capital Management
2.1.3 Working Capital and Liquidity
2.1.4 Working Capital Policies
2.1.5. Importance of Working Capital Management.
2.2 Theoretical Literature
1) Working Capital Composition and the Pecking Order Theory
2.) Theories of Liquidity and Liquidity Management
a) Anticipated Income Theory
b) Shiftability Theory
c) Liability Management Theory
d) Commercial Loan Theory
2.3 Empirical Review CHAPTER THREE – RESEARCH METHODOLOGY
3.1 Introduction
3.2 Research Design
3.3 Study Area
3.4 Population of the Study
3.5 Sample Size and Sampling method
3.6 Data Type and Instrument for Collecting data
3.7 Validity and reliability of research Instrument
3.8 Model Specification
3.9 Method of Data Analysis
CHAPTER FOUR – PRESENTATION AND ANALYSIS OF DATA
4.1 Presentation of Result
4.2 Hypotheses Testing
4.3 Discussion of Findings
CHAPTER FIVE – SUMMARY OF FINDINGS, CONCLUSION, AND RECOMMENDATIONS
5.1 Summary of Findings
5.2 Conclusion
5.3 Recommendations
REFERENCES
APPENDIX
