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Effect of Cash Conversion Cycle Management on the Profitability of Industrial and Domestic Product Firms in Nigeria

Received: 4 September 2016     Accepted: 22 September 2016     Published: 15 October 2016
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Abstract

The study examined the effect of cash conversion cycle on the profitability of Industrial and Domestic product firms in Nigeria. Receivable ratio, payable ratio and Inventory ratio, were the variables studied in this study. Data were sourced from the annual reports of the selected Industrial and Domestic companies in Nigeria. Generalized least square multiple regression analytical tool was used to test the Hypotheses. The findings show that, AR and AP had significant positive effect on the industries’ profitability ratio at 1% level of significance. On the other hand, the industries’ INV had significant but negative effect on the profitability ratio at 1% level of significance.

Published in Journal of Investment and Management (Volume 5, Issue 6)
DOI 10.11648/j.jim.20160506.12
Page(s) 99-106
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2016. Published by Science Publishing Group

Keywords

Cash Conversion, Profitability, Multiple Regressions

References
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[3] Ching, H. Y. Novazzi, A. and Gerab, F. (2011). Relationship between working capital management and profitability in Brazilian listed companies. Journal of global Business and Economics, 3, 75.
[4] Deloof, M. (2003). Does working capital management affect profitability of Belgian firm? Journal of Business finance and Accounting 30, (3 and 4), 573-587.
[5] Duru, A, N, and Okpe (2015). Cash Conversion Cycle Management on the performance of Health-Care Manufacturing company in Nigeria. Journal of Research in Humanities and Social Science. 3, (10), 07-13.
[6] Eljelly, A. M. A. (2004), "Liquidity - profitability tradeoff: an empirical investigation in an emergingmarket", International Journal of Commerce and Management, 14(2), 48–61.
[7] Falope, O. I. and Ajilore, O. T. (2009). Working capital management and corporate profitability Evidence from panel Data Analysis of selected Quoted companies in Nigeria, research Journal of business management, 3, 73–84.
[8] Howorth, C. P. (2003). The focus of working capital management in Uk small firms. management accounting research, research 14, 97-111, Blackwell publishing.
[9] Gill, A. Biger, N. and Atnur, (2010). The relationship between working capital, management and profitability Evidence from the United state, Business and Economic Journal, vol. 2010, Bej–10, 1-9.
[10] Karaduman, H. A. Aknas, H. E. Caliskan, A. O. and Durer, S. (2011). The relationship between working capital management and profitability. Evidence from an Emerging market, International research Journal of Finance and Economics, Issue 62-67.
[11] Kwasi, S. K. (2010). Working capital management and firms performance. An Analysis of Ghanaian oil marketing firms, INTEQ. GH. Tel: 233-205600002/233-24-9276087.
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[13] Lyroadi, and Lazadis, (2000). Short term financial management of business increases and in Cyprus Business and Economic society international.
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[15] Murugesu, T. (2013).Effect of cash conversion cycle on profitability: Listed Plantation Companies in Sri Lanka, Research Journal of Finance and Accounting, 4(18), 132-137.
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  • APA Style

    Madubuko Cyril Ubesie, Anastasia Duru. (2016). Effect of Cash Conversion Cycle Management on the Profitability of Industrial and Domestic Product Firms in Nigeria. Journal of Investment and Management, 5(6), 99-106. https://doi.org/10.11648/j.jim.20160506.12

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    ACS Style

    Madubuko Cyril Ubesie; Anastasia Duru. Effect of Cash Conversion Cycle Management on the Profitability of Industrial and Domestic Product Firms in Nigeria. J. Invest. Manag. 2016, 5(6), 99-106. doi: 10.11648/j.jim.20160506.12

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    AMA Style

    Madubuko Cyril Ubesie, Anastasia Duru. Effect of Cash Conversion Cycle Management on the Profitability of Industrial and Domestic Product Firms in Nigeria. J Invest Manag. 2016;5(6):99-106. doi: 10.11648/j.jim.20160506.12

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  • @article{10.11648/j.jim.20160506.12,
      author = {Madubuko Cyril Ubesie and Anastasia Duru},
      title = {Effect of Cash Conversion Cycle Management on the Profitability of Industrial and Domestic Product Firms in Nigeria},
      journal = {Journal of Investment and Management},
      volume = {5},
      number = {6},
      pages = {99-106},
      doi = {10.11648/j.jim.20160506.12},
      url = {https://doi.org/10.11648/j.jim.20160506.12},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jim.20160506.12},
      abstract = {The study examined the effect of cash conversion cycle on the profitability of Industrial and Domestic product firms in Nigeria. Receivable ratio, payable ratio and Inventory ratio, were the variables studied in this study. Data were sourced from the annual reports of the selected Industrial and Domestic companies in Nigeria. Generalized least square multiple regression analytical tool was used to test the Hypotheses. The findings show that, AR and AP had significant positive effect on the industries’ profitability ratio at 1% level of significance. On the other hand, the industries’ INV had significant but negative effect on the profitability ratio at 1% level of significance.},
     year = {2016}
    }
    

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    T2  - Journal of Investment and Management
    JF  - Journal of Investment and Management
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    UR  - https://doi.org/10.11648/j.jim.20160506.12
    AB  - The study examined the effect of cash conversion cycle on the profitability of Industrial and Domestic product firms in Nigeria. Receivable ratio, payable ratio and Inventory ratio, were the variables studied in this study. Data were sourced from the annual reports of the selected Industrial and Domestic companies in Nigeria. Generalized least square multiple regression analytical tool was used to test the Hypotheses. The findings show that, AR and AP had significant positive effect on the industries’ profitability ratio at 1% level of significance. On the other hand, the industries’ INV had significant but negative effect on the profitability ratio at 1% level of significance.
    VL  - 5
    IS  - 6
    ER  - 

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Author Information
  • Department of Accountancy, Enugu State University of Science and Technology, Enugu, Nigeria

  • Department of Accountancy, Enugu State University of Science and Technology, Enugu, Nigeria

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