The Relationship between Working Capital Management and Account Receivable
Ajanaku, Emmanuel Ademola & Oluwayomi Ayoade Ekundayo
Department of Accounting, Joseph Ayo Babalola University, Ikeji-Arakeji, Ilesha, Osun State
Department of Actuarial Science & Insurance, Joseph Ayo Babalola University, Ikeji-Arakeji, Osun State
Email: ajibest2001@yahaoo.com , oaekundayo@jabu.edu.ng
Corresponding Author: Oluwayomi Ayoade Ekundayo
ABSTRACT
This paper dealt with the relationship between working capital management and account receivable in some selected metal manufacturing companies in Nigeria. in order to achieve this objective of the study, a survey designed was adopted to gather data for the study. The study made copious use of secondary data derived from the annual financial report of the selected metal manufacturing companies for the periods 2007-2016 financial years. More so, a purposive random sampling technique was used to select five metal manufacturing companies from the population of 15 metal manufacturing in Nigeria. The ordinary least square regression was used to test the hypotheses formulated for the study. the result of the findings revealed that there was a significant relationship between working capital management and account receivable. This inference was based on the fact that the p-value of the f-statistic computed of 0.000 was less than the critical value of 5%. In fact, the coefficient of determination (r2) of 0.996 obtained indicated the fact that 99.60% of account receivable might be due to effective working capital management. It was concluded that working capital management and account receivable were positively related. it was recommended that effective working capital management should be encouraged in the metal manufacturing companies for the betterment of their accounts receivable.
