Inventory Management and Firm Performance Nexus in Listed Manufacturing Companies

Shakirat Adepeju BABATUNDE; Abass Oyeshola BELLO; Sunday Precious AJAYI; Fasiat Iyabode Adepeju BALOGUN

Shakirat Adepeju BABATUNDE Lagos State University of Science and Technology, Isolo, Lagos
Abass Oyeshola BELLO Lagos State University of Science and Technology, Isolo, Lagos
Sunday Precious AJAYI National Open University of Nigeria, McCarthy study Centre, Obalende, Lagos
Fasiat Iyabode Adepeju BALOGUN Federal University of Agriculture, Abeokuta, Ogun State

Keywords: Firm performance, Inventory Management, Listed Manufacturing Firms, Nigeria

Abstract

This study aimed to examine the effect of inventory management on firm performance in Nigerian-listed manufacturing companies. It used an ex-post facto research design. This study used descriptive, Pearson correlation coefficient r and linear regression r statistical analysis. The study covered 2014 to 2023; data was from 12 Nigerian listed manufacturing firms that published financial reports. This study used a random sampling technique. The findings show no significant effect of stock turnover rate on gross profit margin (p=6.21, p>0.05), and there is a significant effect of stock turnover rate on net profit margin (p=2.34, p<0.05). There is a significant effect of stock turnover rate on return on assets in the listed manufacturing firms in Nigeria (p=0.65, p<0.05). The gross profit result implies that manufacturing and trading activities resulting in gross profit need immediate attention for improved margins because the stock turnover rate appears low during the period under review. Therefore, this study recommended that management encourages inventory control practices because of their significant influence on firm performance.