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Research Article Open access CC BY 4.0

Effect of Cash Conversion Cycle on Firm Performance of Quoted Manufacturing Firms in Nigeria

Chude, Nkiru Patricia, Chude, Daniel Izuchukwu

Journal of Economics, Management and Trade · pp. 142–152 · Published 28 Nov 2022

10.9734/jemt/2022/v28i111063

Abstract

This study examines the effect of the cash conversion cycle (CCC) on the firm performance of quoted manufacturing firms in Nigeria. The study adopted the ex-post facto research design. The sample comprised twenty-one quoted manufacturing companies on the Nigerian Stock Exchange selected using the purposive sampling technique. The study relied on secondary data which was analysed using multiple regression techniques. The results showed that CCC had a negative non-significant effect on return on assets (ROA) and return on equity (ROE). Additionally, Generalised Least Squares were used to test for individual components of the CCC effect on ROA and ROE. The study recommends that managers pay crucial attention to the working capital components and the utilisation of technological breakthroughs, such as the Advanced Manufacturing Techniques as it affects the value of the firm.

Cash conversion cycle manufacturing firms Nigeria technological breakthroughs

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