Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)


Strategic Management of Working Capital and Financial Performance of Listed SMEs In Nigeria

Author(s): Abimbola Abosede JOSHUA, Godswill Osagie OSUMA, Ochei Ailemen IKPEFAN, AGBEYANGI B.A., Areghan ISIBOR

This study revealed the effects of effective management of WC on the financial performance of listed SMEs in Nigeria. The data for the study was spawned from the annual reports published by the listed SMEs in Nigeria. The proxy for the dependent variable is profit after tax (PAT) while that of the independent variables includes; inventories, trade and other receivables, gross profit and monetary policy rates. There are Nine (9) listed SMEs on the Alternative Security Markets (ASeM) while 5 were sampled by adopting the scientific random sampling technique. The study made use of panel regression analysis to empirically unravel the effects of the independent variables on the dependent variable of SMEs under study for seven years spanning from 2012 to 2018. It was revealed that positive but insignificant relationship exist between the dependent variable and three (3) independent variables, only trade and other receivables (TOR) were significantly and negatively related to the dependent variable. Thus, the recommendation that the Nigerian government should revisit the interest rate on SMEs loans to enhance accessibility and affordability which in the long run promotes the development of the sector and the nation at large.

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