Abstract

USING GROSS PROFIT MARGIN (GPM) MODEL TO TEST THE RELATIONSHIP BETWEEN WORKING CAPITAL MANAGEMENT AND PROFITABILITY OF COMPANIES LISTED ON THE NIGERIAN STOCK EXCHANGE

Dr. Aminu Yusuf

Volume: 9 Issue: 3 2019

Abstract:

This study had successfully used Gross Profit Margin (GPM) to test the relationship between working capital management and profitability of companies listed on the Nigerian Stock Exchange. Panel data methodology was employed to test this relationship and a sample of 55 manufacturing companies listed on the Nigerian Stock Exchange. Panel regression results and findings revealed a statistically significant relationship between major components of working capital (ACP and ICP) and profitability of companies. It was therefore recommended that more restricted working capital investment policy is more profitable than a more flexible policy by the Nigerian manufacturing firms listed on the stock exchange.

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