AN EMPIRICAL ANALYSIS OF WORKING CAPITAL MANAGEMENT PRACTICES AND PROFITABILITY IN SELECTED FOOD AND BEVERAGE FIRMS

The main objective of this research was to investigate the relationship between working capital management and profitability of food and beverages manufacturing firms listed on the Nigerian Stock Exchange. The study used secondary data of 120 firm-year observations between 2002 and 2011. Survey research design was adopted. The data were analyzed using Descriptive Statistics, Correlation Analysis and Multiple Regression Analysis. The variables for this study were categorized into three: Dependent variables (Net Operating Profit), independent variables (Working Capital Management), and control variables. The study found that there is relatively strong positive and significant relationship between Working Capital management and Net Operating Profit and that a positive but insignificant relationship exist between Cash Conversion Cycle and Net Operating Profit. Also, Account Collection Period has significant negative relationship with Net Operating Profit while Inventory conversion Period and Account payment period have insignificant negative relationship with Net operating profit of food and beverages manufacturing companies in Nigeria