Trade Receivable Management and Financial Performance of Listed Consumer Goods Companies in Nigeria

Abstract

The general purpose of this study is to determine whether trade receivable influences the financial performance of listed consumer goods companies in Nigeria. The specific objectives are: to ascertain if Account Collection Period (ACP) influences Net Profit Margin of listed consumers goods companies in Nigeria, to investigate if Account Receivable Turnover (ART) influences Net Profit Margin of listed consumer goods companies in Nigeria, to evaluate if Account Collection Period (ACP) influences Return on Asset of listed consumer goods companies in Nigeria, to determine if Account Receivable Turnover (ART) influences Return on Asset of listed consumer goods companies in Nigeria. The methodology adopted in the study was ex-post facto research design. The Secondary data used was obtained from annual report and account of ten selected consumer goods companies in Nigeria stock exchange from 2012-2021. The statistical tools used include descriptive statistics, Pearson correlation and multiple regression analysis. The finding showed that Trade Receivable had a significant positive relationship with Financial Performance. It was discovered that Account Collection Period had a negative relationship between Net Profit Margin and Return on Asset, while Account Receivable Turnover (ART) had a positive relationship between Net Profit Margin and Return on Assets. The study therefore concludes that trade receivable influenced financial performance. It was recommended among other that managers of listed consumer goods companies should adopt efficient credit policy that will ensure short period of account receivable in order to improve financial performance of their corporation.