IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 8 NO. 8 2022
DOI: https://doi.org/10.56201/jafm.v8.no8.2022.pg113.128

---

Trade Receivable Management and Financial Performance of Listed Consumer Goods Companies in Nigeria

JONAH, Ngbomowa Moses PhD., IMO, ThankGod Obutor, PhD, NWANYANWU, Kingdom Uchenna, PhD

---

Abstract

The general purpose of this study is to determine whether trade receivable influences the financial performance of listed consumer goods companies in Nigeria. The specific objectives are: to ascertain if Account Collection Period (ACP) influences Net Profit Margin of listed consumers goods companies in Nigeria, to investigate if Account Receivable Turnover (ART) influences Net Profit Margin of listed consumer goods companies in Nigeria, to evaluate if Account Collection Period (ACP) influences Return on Asset of listed consumer goods companies in Nigeria, to determine if Account Receivable Turnover (ART) influences Return on Asset of listed consumer goods companies in Nigeria. The methodology adopted in the study was ex-post facto research design. The Secondary data used was obtained from annual report and account of ten selected consumer goods companies in Nigeria stock exchange from 2012-2021. The statistical tools used include descriptive statistics, Pearson correlation and multiple regression analysis. The finding showed that Trade Receivable had a significant positive relationship with Financial Performance. It was discovered that Account Collection Period had a negative relationship between Net Profit Margin and Return on Asset, while Account Receivable Turnover (ART) had a positive relationship between Net Profit Margin and Return on Assets. The study therefore concludes that trade receivable influenced financial performance. It was recommended among other that managers of listed consumer goods companies should adopt efficient credit policy that will ensure short period of account receivable in order to improve financial performance of their corporation.

keywords:

Net Profit Margin, Account Collection Period, Net Profit Margin, Account Receivable Turnover, Return on Asset, Financial Performance, Trade Receivable

---

References:

Abdulhzeez, D.A, Baba, N.A, Fatima, K.R & Abdurrahman .F (2018). Working Capital
Management and Financial Performance of Listed Conglomerate companies in
Nigeria. Journal of Accounting, Financial and Auditing Studies, 4(2), 49-66
.

Abdullahi, H.G, Rahima, A.A & Abasi .A (2016). Effect of Trade Receivables and Inventory
Management on SMEs Performance. British Journal of Economics,
Management and Trade, 12(4), 1-8.

Adeniyi, A.A. (2008), An Insight into Management Accounting, 4 th Ed. Lagos, Eltodu
Ventures Limited.

Ajayi, M.A, Abogun, S. & Odediran, T.H (2017), Impact of Working Capital Management
on Financial Performance of Quoted Consumer goods Manufacturing
Companies in Nigeria. Covenant Journal of Business and Social Sciences, 8(2),
1-22.

Bab, S. Muhammad, A.G & Najam, U.S (2018), The Impact of Working Capital
Management on Profitability. Case Study of Pharmaceutical and Chemical
Firms Listed in Karachi stock Exchange. International Journal of Economics,
Commerce and Management, 6(3), 200-220

Chris, Y.O. Kennedy, K.N & Agnes, N (2017). Effect of Receivable Management Practices
on Financial Performance. A Case study of Deloitte East Africa limited.
International Journal of Science and Research, 6(10), 1401-1406.

Clarke, T. (2004). The Stakeholder Corporation; A Business Philosophy for the information
Age. Theories of Corporate Governance, the Philosophical foundation of
Corporate Governance London; Rout Ledge.

Dirie, A.O & Ayuma, C. (2018). Effect of Accounts Receivables Management on Financial
performance in Small and Medium Firms in Mogadishu-Somalia. International
Journal of Management and Commerce Innovations, 6(1), 378-383.

Divya, J; Simran .J & Vartika A. (2017). Effect of Receivables Management on Profitability.
A study of commercial vehicle industry in India. International Journal of
Applied Science and Management, 2(2), 246-255.

Egbide, B. (2009). Working Capital Management and Profitability of Listed Companies in
Nigeria. Nigeria Research Journal of Accountancy, 1(1), 44-53.

Erich, A, & Helford, D.B.A (2001). Financial Analysis, Tools and Techniques; A Guide for
Managers. 1st Edition, US, Megraw Hill Education.

Femi, S & Ali, I.A (2016). The Relationship between Working Capital Management and
Profitability. Evidence from Turkey. Business and Economic Research Journal,
7(2), 1-14.

Francais, M & Charles Y.T (2018). Accounts Receivable Management and Financial
Performance of Embu Water and Sanitation Company Limited in Kenya.
International Academic Journal of Economics and Finance, 3(2), 216-240.

DOWNLOAD PDF

---

Back