Tansian University Journal of Arts, Management & Social Sciences

This study investigated the effect of working capital management on the financial performance of natural resource firms listed on Nigeria exchange limited from 2017 to 2022. The specific objectives of the study were to determine the effect of average payment periods, average collection period, inventory conversion period, cash conversion cycle and current ratio on the financial performance of firms listed on Nigeria exchange limited. The hypotheses synchronized with the objectives and the cause and effect research design was adopted for the study. Secondary data was collected from the annual reports of the entire four firms listed in that sector, which was analysed using descriptive statistics, correlation and ordinary least square regression estimation. The study found that all the components of working capital management studied have statistical significant effect on the financial performance (Return on Assets) of firms listed on the natural recourses sector of Nigeria exchange limited. The study therefore recommends amongst others that the firms should as a matter of fact be tactful in handling accounts payables to ensure that days of accounts payables must be higher than the days of accounts receivables, which will provide them with additional capital that will facilitate higher turnover and increased profitability.

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