Working Capital Management and Financial Performance of Listed Consumer Goods and Industrial Goods Companies In Nigeria: A Comparative Study

Abstract

The failure of Nigeria's manufacturing sector, which includes consumer and industrial goods companies, may be attributed to an inability to adequately manage their firms' working capital, which is the primary reason why the sector is deemed underperforming, with their contribution to the Nigerian economy falling below 10%. This study examined a comparative analysis of working capital management and financial performance across Nigerian listed consumer and industrial goods firms. The study used an ex post facto design. The study used secondary data from the annual reports and accounts of 10 consumer products and 10 industrial goods enterprises during a 10-year period (2015-2024). The failure of Nigeria's manufacturing sector, which includes consumer and industrial goods companies, may be attributed to their inability to adequately manage their firms' working capital, which in turn serves as the primary reason why the sector is deemed underperforming, with their contribution to the Nigerian economy dropping below 10%. This study conducted a comparative analysis of working capital management and financial performance in Nigerian listed consumer and industrial products firms. The study employed an ex post facto design. Over a ten-year period, the study relied on secondary data sources such as annual reports and accounts from ten consumer products and ten industrial goods businesses. According to the study, listed consumer goods businesses in Nigeria managed their working capital in such a manner that it had a significant influence on financial performance during the study period, but listed industrial products firms did not manage their working capital adequately. The research proposed, among other things, that both publicly traded consumer and industrial product companies work more to recruit the help of factoring agents, since this will minimize the frequency of bad debt losses and other credit-related costs.