cash management and corporate profitability: a study of selected listed manufacturing firms in nigeria

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ID: 190616
2012
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Abstract
Cash has always being disregarded in financial decision making since it involvesinvestment and financing in short term period. However, it is an important component in firmfinancial management decision. This study thereforeinvestigates empirically the relationship betweencash management and profitability in listed manufacturing companies in Nigeria. Cash conversioncycle is used as the measure for cash management asused in Raheman and Nasr (2007). Current ratio,debt ratio and sales growth were used as control variables. This study utilizes secondary data whilePearson’s correlation and regression analysis wereused in analyzing the data for a sample of 15 listedmanufacturing companies in Nigeria between 2005-2009.The results of the empirical findings showthat there is a strong negative relationship between cash conversion cycle and profitability of thefirms. It means that as the cash conversion cycle increases it will lead to decreasing profitability of thefirms. The study therefore recommends that managerscan create a positive value for the shareholdersby reducing the cash conversion cycle to a possibleminimum level and also accounts receivablesshould be kept at an optimal level. This study willalso help companies in nigeria see the need forcash mangement techniques.
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uwuigbe2012actacash Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors ;Olubukunola Uwuigbe;Uwuigbe Uwalomwa;Ben-Caleb Egbide
Journal organic process research and development
Year 2012
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