Working Capital Management and the Performance of Selected Deposit Money Banks in Nigeria

Umoren, A. O.; Udo, Ekubiat

doi:10.9734/bjemt/2015/15132

Cited by 8 publications

(21 citation statements)

References 8 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…The findings also support Umoren and Udo (2015), who examined the effects of working capital management on the profitability and liquidity of selected deposit money banks using Pearson correlation matrix to determine the level of the incidence of multicollinearity. This study also aligns with Umoren and Udo (2015) as it was observed in the study that the model exhibits no incidence of multicollinearity (see Table 5). Hoque et al (2015) carried out a study on management of working capital and profitability in Bangladesh using cement industry and revealed that profitability position and working capital were not satisfactory.…”

Section: Resultssupporting

confidence: 89%

“…The terms of working capital management (WCM) and management of working capital (MWC) can be used interchangeably. Aborode (2005) opined that working capital management is the balancing of the liquidity and profitability objectives of the firm, as well as taking cognizance of risk as cited in Umoren and Udo (2015). Management of working capital (MWC) is concerned with the differences that arise in the management of current assets, current liabilities and the interrelationships that exist between them.…”

Section: Conceptual Frameworkmentioning

confidence: 99%

“…Management of working capital (MWC) is concerned with the differences that arise in the management of current assets, current liabilities and the interrelationships that exist between them. Umoren and Udo (2015) further define the management of working capital (MWC) as all management actions and decisions that ordinarily influence the size and effectiveness of the working capital. Therefore, the aim of working capital is to optimally manage current assets and current liabilities such that an acceptable level of net-working capital can be achieved.…”

Section: Conceptual Frameworkmentioning

confidence: 99%

“…Working capital is highly imperative to maintaining the solvency, liquidity, survival, and profitability of a firm (Hoque et al, 2015). Yahaya and Bala (2015) also stated that ineffective working capital management reduces profitability and may also lead to the financial crises of an organization which negates what Umoren and Udo (2015) posited that profitability is a yardstick to measuring the operating efficiency of a firm, but amongst the varying factors affecting bank performance, ineffective working capital management was not considered as one of them. In time past, the Nigerian banking sector has witnessed deposit money banks inability to meet up obligations of customers due to inadequate liquidity.…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Working capital management and bank performance: empirical research of ten deposit money banks in Nigeria

Osuma

Ailemen

Osabohien

et al. 2018

Banks and Bank Systems

View full text Add to dashboard Cite

Working capital management is germane for the success of the banking industry in Nigeria, especially the current state of the sector, which is engulfed with the effect of the global decline in oil price that has resulted in non-performing loans, deterioration of the bank asset quality, laying-off of staff amongst others. This is one of the reasons why the profitability of the banking sector deeply depends on the efficient management of a bank’s working capital. Therefore, the objective of this study is to examine how profitability of banks can be enhanced through the working capital management. To empirically carry out the analysis, panel data which consist of ten (10) deposit money banks in Nigeria for seven years (2010–2016) employing the panel fixed effect, panel random effect and the pooled OLS for the two models, which were used as proxies for bank profitability, which includes return on asset (ROA) and return on equity (ROE) to examine the best measure for bank profitability, with the indicators of working capital; net interest income, current ratio, profit after tax, and monetary policy rate. Results of the study showed that working capital management has a significant effect on the profitability of the selected banks and that return on asset is a better measure for bank profitability. Therefore, the study recommends that there should be a periodic review of the minimum capital base of the Nigerian deposit money banks so as to mitigate the effects of inflation and inculcate the consequence of time value of money, because the purchasing power of one (₦1) naira or one ($1) dollar today would not be sufficient to purchase what it can purchase today for tomorrow.

show abstract

Section: Resultssupporting

confidence: 89%

Section: Conceptual Frameworkmentioning

confidence: 99%

Section: Conceptual Frameworkmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Working capital management and bank performance: empirical research of ten deposit money banks in Nigeria

Osuma

Ailemen

Osabohien

et al. 2018

Banks and Bank Systems

View full text Add to dashboard Cite

show abstract

“…Muhammad et al (2015) noticed the direct and significant relationship between the average period of collection of claims, the current ratio, and firm size and its profitability as well as an inverse and significant relationship between the period of inventory turnover and the average period of paying debts and profitability. Umoren and Udi (2015) carried out a study on the effect of working capital management on the liquidity and profitability of selected Nigerian deposit banks and found an inverse and significant relationship between cash conversion cycle and profitability as well as an inverse and significant relationship between debt payment period and liquidity. This is while the period for collection of claims has a direct and significant relationship with liquidity.…”

Section: Review Literature and Theoretical Principlesmentioning

confidence: 99%

Relationship Between Cash Flow Management and Financial Performance of Companies Listed on the Tehran Stock Exchange

Ramazani

Salehi

Laridashtbayaz

2019

ZREFIS

View full text Add to dashboard Cite

Purpose–Cash is one of the most important assets to business firms. To evaluate a business firm, the competencies of a firm in creating and increasing the cash are of great importance for investors, creditors, and other beneficiaries. So, the main objective of the current study is to evaluate the relationship between cash flow management and firm financial performance in Iran. Design/methodology/approach – In the present study, using the data of 155 companies listed on the Tehran Stock Exchange during 2009-2016, panel data, and multivariable regression, we tried to analyze the relationship cash flow management and financial performance. Findings –The results obtained indicated that there is a relationship between the decrease (increase) of cash conversion cycle and operational cash conversion cycle and the improvement (debilitation) of financial performance. Moreover, the pending period for collection of sales revenue, cash conversion cycle, and operational cash conversion cycle is the Granger Cause of return on assets. Originality/value – Since a few studies have been conducted on cash flow management in Iran, the current study has covered the topic in Iran..

show abstract

Pengaruh Manajemen Modal Kerja Pada BankKonvensional yang Terdaftar di BEI Periode 2013-2017

Rustandi

2018

JIMB

View full text Add to dashboard Cite

The purpose of the study is to find out how the influence of working capital management on conventional banks listed on the Stock Exchange for the period 2013-2017. This study uses a quantitative method with a sample of all national commercial banks in Indonesia that are listed on the Stock Exchange from 2013-2017. From the whole study sample for 5 years, there were 245 observations which were then analyzed using the fixed effect approach after going through the stages of selecting the best model. The results of this study found that working capital management has a positive effect on the profitability of conventional banks with R2 values of 86.73%, which means that the model is very good at explaining the research variables. In this study, DCP found a positive effect on profitability, while CPP and CCC negatively affected the profitability of conventional banks, while the control variable namely leverage had a positive effect and the size of the company had a negative effect.AbstrakTujuan penelitian yaitu untuk mengetahui bagaimana pengaruh manajemen modal kerja pada bank konvensional yang terdaftar di BEI periode 2013-2017. Penelitian ini menggunakan metode kuantitatif dengan sampel seluruh bank umum nasional di Indonesia yang terdaftar di BEI dari tahun 2013-2017. Dari keseluruhan sampel penelitian selama 5 tahun diperoleh jumlah 245 observasi yang selanjutnya dianalisis dengan menggunakan pendekatan fixed effect setelah melalui tahapan pemilihan model terbaik. Hasil penelitian ini menemukan bahwa manajemen modal kerja berpengaruh positif terhadap profitabilitas bank konvensional dengan nilai R2 sebesar 86.73%, yang artinya model sangat baik menjelaskan variabel penelitian. Dalam penelitian ini ditemukan DCP berpengaruh positif terhadap profitabilitas, sedangkan CPP dan CCC berpengaruh negatif terhadap profitabilitas bank konvesional, sedangkan variabel kontrol yaitu leverage berpengaruh positif dan ukuran perusahaan berpengaruh negatif.Kata Kunci: profitability; working capital

show abstract

Working Capital Management and the Performance of Selected Deposit Money Banks in Nigeria

Cited by 8 publications

References 8 publications

Working capital management and bank performance: empirical research of ten deposit money banks in Nigeria

Working capital management and bank performance: empirical research of ten deposit money banks in Nigeria

Relationship Between Cash Flow Management and Financial Performance of Companies Listed on the Tehran Stock Exchange

Pengaruh Manajemen Modal Kerja Pada BankKonvensional yang Terdaftar di BEI Periode 2013-2017

Contact Info

Product

Resources

About