Effect of Working Capital Management on Financial Performance of Marshal Plant and Chemical Industries in Enugu, Enugu State

• Post by: birpo
• February 23, 2026
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Nnaji, Moses Okechukwu ¹, Prof. Ikechukwu I. Okpe ²   & Prof. Caroline Nwankwo³

Abstract         

This study examines the effect of working capital management on the financial performance of Marshal Plant and Chemical Limited in Enugu, Enugu State. Employing a panel data methodology with a fixed effects regression model, the research utilizes secondary data spanning from 2009 to 2023 to assess the relationship between Accounts Receivable Turnover Ratio (ARTR), Inventory Turnover Ratio (ITR), and Cash Conversion Cycle (CCC) on Annual Profit (AP). The analysis reveals statistically significant positive relationships between ARTR, ITR, and CCC with AP. Specifically, higher ARTR (coefficient: 1.431, p-value: 0.0207), ITR (coefficient: 0.710, p-value: 0.0279), and CCC (coefficient: -0.249, p-value: 0.0320) are associated with increased Annual Profit. The study validates theoretical frameworks on working capital management by demonstrating that efficient management of receivables, inventory, and cash conversion processes can enhance profitability. Based on these findings, the research provides actionable recommendations for improving working capital practices within the paint industry, contributing to both academic literature and practical financial management strategies. The results offer valuable insights for similar firms in the manufacturing sector, emphasizing the critical role of operational efficiency in achieving financial success

Keywords: Working capital management, financial performance, Accounts receivable turnover ratio, Inventory turnover ratio & Cash conversion cycle