Gusau Journal of Accounting and Finance (May 2024)
ACCOUNT RECEIVABLE MANAGEMENT AND FINANCIAL PERFORMANCE OF LISTED CONSUMER GOODS FIRMS IN NIGERIA
Abstract
The study looks at the implications of account receivables management of quoted consumer goods firms’ financial performance in Nigeria. The study population is made up of the entire consumer goods firms listed in Nigeria. The total population stands at 23 consumer goods firms as at 31st December, 2022. A sample of 13 firms were arrived at by adopting a census sampling techniques by selecting only firms with complete financial information for a period of 2013 to 2022. The study employed a secondary data gathering strategy to obtain data from the annual report and accounts of selected firms. Data for the study were analysed with assistance of STATA 13 statistical software. The findings of the study reveals that average receivable turnover has negative insignificance impact on financial performance and average collection period, debt asset ratio, and current ratio have significant negative effect on return on equity. Based on its findings, the study concludes account receivables management to have negative significance effect on financial performance of listed consumer goods firms in Nigeria. The study also recommends that consumer goods firms listed should maintain low average collection period as high collection period might lead to lower financial 210 performance. This will be achieved by developing appropriate mechanism to encourage prompt payment by customers. Consumer goods firms listed should maintain an optimum debt assets ratio as too much debt might result to poor financial performance which ultimately leads to lower returns to shareholders on their capital investment in the company. Consumer goods firms listed in Nigeria should also maintain low current ratio as too much investment in current assets might lead to capital tight up on investment with lower return which might result in to poor financial performance.
