Impact of Working Capital Management on Small and Medium Enterprises' Performance in NigeriaRaji Sadiq*
Department of Accounting and Finance, Fountain University, Osun State, Nigeria
- *Corresponding Author:
- Raji S
Fountain University, Osun State, Nigeria
E-mail: [email protected]
Received Date: November 29, 2016; Accepted Date: January 24, 2017; Published Date: February 04, 2017
Citation: Sadiq R (2017) Impact of Working Capital Management on Small and Medium Enterprises' Performance in Nigeria. Arabian J Bus Manag Review 7: 285. doi: 10.4172/2223-5833.1000285
Copyright: © 2017 Sadiq R. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
Working capital management is very important in measuring and balancing between risk and efficiency of firm’s performance. Firms has experienced various trend in ensuring the survival of the business in short and long term. This study measures the impact of working capital management on small and medium enterprises' performance in Nigeria, Osun State as a focus area for the period 2010-2014 by using firm by firm statement of financial position and income statement. This is done by calculating return on assets as a tool to measure firms' performance in Nigeria. Data were analysed using ordinary least square method to test the hypothesis formulated. Our findings indicate a mixed effect of WCM on performance. It was concluded that account payables period, cash conversion cycle and net trading cycle has positive effect on performance. Account receivables period and inventories turnover in days has negative relationship with performance.