Olayinka Akinlo

Dynamics of Working Capital in Nigeria: Working Capital, Profitability, Panel, Determinants, Causality, Nigeria Olayinka Akinlo

The study examined the trends and pattern of working capital behaviour in selected quoted companies in Nigeria over the period 1999?2007, and analysed the profit profile of these companies. In addition, the study investigated the co-movement and the causality relationship between working capital and profitability of the selected quoted companies. Secondary data on 66 purposively selected non-financial firms for the period 1999-2007 were used for the analysis. The data were sourced from the Annual Reports and Accounts of the sampled firms, Nigerian Stock Exchange Factbook 1999 ? 2007 and the Central Bank of Nigeria Statistical Bulletin 2007. Descriptive statistics and inferential statistics were used in analysing the data. Econometric techniques and panel-based error correction models were also employed. The results disclosed that aggregate profit level for the entire firms decreased at 0.02 percent yearly. The study concluded that changes in the components of working capital have negative effect on profitability of companies in Nigeria.