EFFECT OF CASH CONVERSION CYCLE ON CASH FLOW PERFORMANCE OF SELECTED MANUFACTURING FIRMS IN NIGERIA

Abstract

The study examined the effect of cash conversion cycle on cash flow performance of selected manufacturing firms in Nigeria for the period 2011-2020. Three research questions were developed to guide the study and a corresponding three hypothesis was formulated for the study. The study adopted the Ex-Post Facto research design. The population of the study included 57 manufacturing firms quoted on the Nigerian exchange group (NXG) as at 31st December 2022. The study relied on secondary sources of data which was obtained from Nigerian exchange group (NXG) as at 31st December 2022. The multiple regression analysis was employed in validating the hypotheses of the study. Findings emanating from the study reveals that there is no significant effect of inventory turnover period on operating cash flow performance of selected manufacturing firms in Nigeria (P > 0.05); average collection period has statistically significant impact on operating cash flows performance of selected manufacturing firms in Nigeria (P < 0.05). Consequent on the findings, the study therefore recommended that stakeholders should prioritize initiatives aimed at the optimization of working capital components; enhancement of inventory management strategies and a continuous monitoring and adjustment of payment periods.