Working Capital Management and Performance of Six Deposit Money Banks in Nigeria

Ikpefan, Ochei Ailemen; Osuma, Godswill Osagie; Ahire, Tersoo; Evbuomwan, Grace O.; Kazeem, B.; Chimezie, Peace Onyedikachi

doi:10.18488/journal.aefr.2021.116.418.428

Cited by 3 publications

(2 citation statements)

References 10 publications

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“…The result suggests that a greater emphasis on cash management within the operating cycle offers a more efficient approach to DWCM. These findings align with prior research conducted by Amponsah-Kwatiah and Asiamah (2020), who highlight a strong and significant positive association between CCC and both ROA and ROE, as well as Ailemen et al (2021), who assert that liquidity ratio and the capital adequacy ratio affect asset return significantly and positively.…”

Section: Impact Of Dwcm On Operating Profitsupporting

confidence: 90%

Impact of dynamic working capital management on operational efficiency: empirical evidence from Scandinavia

Yeboah,

Kjærland

2024

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PurposeConsumer goods firms often tie up inventory and accounts receivable resources, creating cost and liquidity issues. Dynamic working capital management (DWCM) can mitigate these concerns and enhance operational profitability. The study investigates DWCM's impact on operational efficiency (OE).Design/methodology/approachThe empirical estimation uses pooled ordinary least squares (OLS), random effect and system generalized method moments (GMM) regression analysis of consumer goods firms in Scandinavia from 2005 to 2022 to present the results.FindingsThe findings indicate that DWCM has an inverse relationship with operating cost, while positively impacting operating profit. The final outcome demonstrates that DWCM enhances OE. Furthermore, the working capital ratio (WCR) consistently exceeds the cash conversion cycle (CCC) in all models, indicating that prudent management of cash in accounts receivable, inventory and accounts payable leads to higher cost savings and superior performance.Practical implicationsThe results suggest that organizations that prioritize the management of the absolute cash committed to inventory, receivables and payables as much as the CCC experience improved OE.Originality/valueThis paper adds to the literature on how DWCM affects OE in the consumer goods sector. It also highlights the impact of time management and cash management in WCM on OE. Additionally, it analyzes how DWCM variables affect operating costs and profits, shedding light on their efficiency impact.

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Section: Impact Of Dwcm On Operating Profitsupporting

confidence: 90%

Impact of dynamic working capital management on operational efficiency: empirical evidence from Scandinavia

Yeboah,

Kjærland

2024

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“…It revealed that Trade Receivable Period had a significant effect on the Returns on Assets, while Current ratio, Trade Payable and Inventory Conversion Period had an insignificant effect on Returns on Assets. It recommended that financial managers should set shorter credit period, negotiate with suppliers for an increase in payment period and monitor inventory levels so as to reduce the number of day inventories are held before they are sold Ikpefan, Osuma, Ahire, Evbuomwan, Kazeem & Chimezie (2021),. investigated working capital management and the performance of deposit money banks in Nigeria.…”

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confidence: 99%

Working Capital Management on Economic Growth and Development: Emphasis From Listed Conglomerates Firms in Nigeria

Egolum¹,

Uchenna²,

Nympha³

et al. 2023

IJRCMS

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The study investigates the effect of working capital management on economic growth and development, with emphasis from listed conglomerates firms in Nigeria. Four objectives were employed with coverage of a ten-year period spanning from 2011 to 2020. Secondary data were used in the study with total population based on five (5) conglomerate firms listed on Nigerian Stock Exchange. The tests of the four null hypotheses were carried out using spearman rank correlation analysis and also employed panel least square (POLS) regression analysis. The result of the analyses revealed the following: Cash conversion cycle (Random effect = -0.03 (0.002)) has a negative significant influence on firm profitability. Inventory period (Random effect = 0.02 (0.262) has a positive insignificant influence on firm profitability. Current ratio (Random effect = 15.55 (0.002) also has positive but significant influence on firm profitability. Quick ratio (Random effect = -12.45 (0.035) has a negative significant influence on firm profitability. The study concludes that cash conversion cycle and quick ratio tend to decrease firm profitability while we provide evidence that current ratio improves firm profitability. The study recommends, among others, that Management of these conglomerates companies should advocate for policies that will enhance swift conversion of inventory to cash to improve firm profitability for economic growth and development in Nigeria.

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Determining the nexus between Dynamic Working Capital Management and Operational Efficiency in Emerging Southeast Asia

Bashir,

Ahmad,

Sherif

2024

J. Fin. Bank. Review

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Objective— The primary aim of this study is to investigate the effect of dynamic working capital (DWC) management on operational efficiency through operating expenses and operating margins across non-financial firms in emerging markets. Methodology/Technique – This study utilized generalized method of moments (GMM) to evaluate a comprehensive dataset of 438 firms from Indonesia, Malaysia and Thailand for the period 2018 to 2023. Findings – DWC is measured study using both cash conversion cycle (CCC) and working capital ratio (WCR). Results show that optimized DWC management reduces operating expenses (OER) and increases operating margins (OMR). These findings highlight the importance of efficient working capital practices and liquidity management in emerging markets. Novelty – This study provides valuable insights for financial managers in emerging countries, advocating focused strategies on working capital cycles to strengthen operational efficiency and profitability. Type of Paper: Empirical JEL Classification: M13, M40, M49. Keywords: Working capital management, Cash conversion cycle, working capital requirement, Operating efficiency, Emerging countries Reference to this paper should be made as follows: Bashir, R; Ahmad, M; Sherif, S.R. (2024). Determining the nexus between Dynamic Working Capital Management and Operational Efficiency in Emerging Southeast Asia, J. Fin. Bank. Review, 9(2), 49 – 60. https://doi.org/10.35609/jfbr.2024.9.2(1)

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Working Capital Management and Performance of Six Deposit Money Banks in Nigeria

Cited by 3 publications

References 10 publications

Impact of dynamic working capital management on operational efficiency: empirical evidence from Scandinavia

Impact of dynamic working capital management on operational efficiency: empirical evidence from Scandinavia

Working Capital Management on Economic Growth and Development: Emphasis From Listed Conglomerates Firms in Nigeria

Determining the nexus between Dynamic Working Capital Management and Operational Efficiency in Emerging Southeast Asia

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