Effect of Inventory Management on Business Valuation

The study ascertained the effect of inventory management on the firm’s business valuation of health care manufacturing firms in Nigeria, using debtors' collection period, creditors' payment period, inventory turnover as the independent variables and operating cash flow as the dependent variable. Ex Post Facto research design was employed. A sample of seven (7) health care manufacturing firms was used. Data for the study were extracted from the annual audited reports and accounts of the sampled firms. The data were analyzed with descriptive statistics and the hypotheses were tested using panel regression methods. The study showed that debtors' collection period, creditors' payment period inventory turnover have insignificant effect on operating cash flow of the health care firms. This implies that inventory management practices had a positive insignificant effect on the firm’s business performance. Based on the outcomes from the study, the study recommended among others that Health care firms should adopt effective and efficient inventory cost management practices as well as deploy appropriate modern technology for effective inventory management and control.