Working Capital Management and Performance of Six Deposit Money Banks in Nigeria

Asian Economic and Financial Review

article

Ochei Ailemen Ikpefan¹  Godswill Osagie Osuma¹  Tersoo Ahire¹  Grace Evbuomwan²  Bayo Oyero Kazeem³  Peace Chimezie¹ 

[1] Department of Banking and Finance, Covenant University;Department of Economics Augustine University;Department of Banking and Finance Osun State University

关键词: Working capital;    Financial performance;    Return on asset;    Liquidity ratio;    Capital adequacy.;   

DOI  :  10.18488/journal.aefr.2021.116.418.428

学科分类：社会科学、人文和艺术（综合）

来源: Asian Economic and Social Society

【 摘 要 】

Central to any financial institution’s success is working capital management because mismanagement (WCM) can lead to its demise. This research examines the management of working capital in deposit money banks (DMBs) in Nigeria. This study evaluated the impact of liquidity on banks’ performance to analyze how their competitiveness influences capital adequacy and assessed the correlation between loans and advances and deposit money banks’ profitability. The study utilized a regression analysis, in which panel data was used based on data retrieved from the banks’ financial statements from 2010 to 2017. The findings showed that the primary reason banks hold highly liquid assets is to guard against a rise in demand or unforeseen circumstances. Another reason is to finance working capital operations based on the theory of liquid assets. Therefore, based on the findings it is recommended that direct policies are implemented to ensure that high-volume cash transactions are dramatically reduced.

【 授权许可】

CC BY