Financial Management Practices and the Performance of Listed Manufacturing Companies in Nigeria

Abstract

The success of listed manufacturing companies is impacted by financial management practices. In this study, the return on equity of 40 listed manufacturing companies in Nigeria was compared to the effects of financial management practices. Finding out whether there is a significant correlation between financial management practices (via working capital practices, capital structure practices, and corporate governance practices) and the return on equity (ROE) of listed manufacturing companies in Nigeria is the specific goal of this study. The study adopted a correlational research design. In addition, the corporate annual reports and website for the periods 2017-2021 were utilized as the main sources of secondary data. In testing the research hypotheses and ascertaining the significant effect of the variables, the study utilized panel estimation technique methods of data analysis. The research found a strong correlation between working capital management, capital structure, corporate governance, and business performance as measured by return on equity (ROE). In order to improve the performance of Nigerian manufacturing companies, the study advised listed manufacturing companies in Nigeria to make sure that working capital practices, capital structure practices, and corporate governance practices are maintained in all aspects of the organizational decision. To stabilize and enhance return on equity, control factors should also be added to the analysis.