Working Capital Practices of Quoted Non-Financial Firms And Performance Of Nigerian Economy.

Abstract

A firm need to have a balance between liquidity and profitability while performing its daily operations as asserted by Iqbal and Wang, (2015), this daily operations on the short-run, should have somewhat relation with the economy in which its been operated. It is on this background that we beamed the search light on examining the extent to which non-financial firms’ working capital practices contributes to the Nigerian economy using a panel data of nine (9) years (2012-2020). We made use of secondary data comprising the financial reports of the firms collected from NSE Fact Book, CBN, 2020 and thereafter analysed with 3 regression models, viz, POLs, RE and FE. The results revealed that 16.83% of the changes in Nigerian economy in terms of RGDP was caused by the working capital practices of the firms with F-statistics p-value >0.05. This is considered to be too low for an economy to maintain a sustainable performance. We therefore concluded that the working capital practices of quoted non-financial firms in Nigeria contributes an insignificant 29% to the Nigerian economy in terms of the Real Gross Domestics Product.