Working Capital Management and Financial Performance of Quoted Deposit Money Banks: Moderating Effect of Firm Size

This paper investigated the moderating effect of firm size on the relationship between Working Capital Management (WCM) and the Financial Performance of Quoted Deposit Money Banks (DMBs) in Nigeria from 2005–2022. Return on Assets was used as a proxy for Financial Performance, while Current Ratio, Cash Ratio and Loan-to-Deposit Ratio were used as proxies for Working Capital Management. Mixed variable regression models were developed using Return on Assets as the dependent variables while Cash Ratio, Current Ratio, Loan- to-Deposit Ratio and Dummy Variables representing firm sizes as explanatory variables. The regression equations showed that medium-sized banks consistently performed optimally compared to large and small-sized banks. This finding underscores the need to investigate components of the Nigerian banking environment and practices that adversely affect the performance of large and small banks.