Inventory Management and Financial Performance of Listed Industrial Goods Companies in Nigeria

Abstract

The study sought to determine the relationship between inventory management and financial performance of listed industrial goods companies in Nigeria. The predictor variable proxies used include inventory turnover and inventory conversion period while the referents for the criterion variables used for the study were net profit margin and return on assets. The study adopted the use of an ex-post facto research design. Secondary data were used in the study, which was collected from ten listed industrial goods companies in Nigeria for the 2018 to 2020 financial year. The statistical tools used for the study were descriptive statistics, regression analysis and Pearson’s product-moment correlation coefficient. The result of the finding shows that there is a significant positive relation between inventory turnover, inventory conversion period and net profit margin as well as return on assets of listed industrial goods companies in Nigeria. The study, therefore, concluded a significant relationship between inventory management and financial performance of listed industrial goods companies in Nigeria. The study recommended that the management of listed industrial goods companies should monitor inventory to ensure that optimum levels are maintained at all times to improve performance.