EFFECT OF WORKING CAPITAL MANAGEMENT ON PROFITABILITY OF LISTED HEALTHCARE FIRMS IN NIGERIAN STOCK EXCHANGE

Abstract

This study seeks to examine the effect of working capital management on the performance of listed healthcare firms in Nigeria for the period of ten years (2011-2020). The listed healthcare firms were Seven (7) as at 31st December, 2020. The study selected Six (6) real pharmaceutical firms from the listed healthcare firms in Nigerian stock exchange based on filter as criteria. Data were sourced from the audited financial statements of the listed firms. The study adopted correlational research design and data were analyzed with the aid of multiple regression model based on ordinary least square. This study reveals that the relationship between inventory turnover days and profitability is positive and significant with coefficient Value of 2.184 and P Value 0.00, while the relationship between cash collection circle is positive and significant with coefficient Value of 2.556 and P Value 0.026. However, debt turnover for the period was found to be negative and not significant to the profitability with coefficient Value of -2.121 and P Value 0.140. Therefore, the study recommended that, board of directors are capable of gaining sustainable competitive advantage by means of effective and efficient utilization of the resources of the companies by carefully increasing their inventory turnover days as well as the cash collection circle in the listed healthcare firms in Nigerian stock exchange.