Effect Of Working Capital Management on Operational Productivity of Brewery Firms in South-East Nigeria

Abstract

This study examines the effect of working capital management on the operational productivity of brewery firms in South-East Nigeria, with operational productivity proxied throughout by Return on Assets (ROA). An ex post facto longitudinal panel design was adopted, drawing exclusively on audit-certified secondary data from the published financial statements of the five active brewery firms in Anambra and Enugu States for the period 2014–2024 at quarterly frequency, yielding a balanced firm-quarter panel of 217 observations. A purposive sampling technique retained all firms meeting the inclusion criteria, in effect, a census of the accessible population. Accounts payable period, accounts receivable period, inventory management period, and the cash conversion cycle were regressed on ROA using the Panel Least Squares (PLS) estimator in EViews 8.0, supported by Hausman, VIF, Durbin-Watson, and Breusch-Pagan-Godfrey diagnostics. The model explained 53.4% of the variation in ROA (F = 9.38, p < 0.001; Durbin-Watson = 1.74). Accounts payable period (β = 0.153, p = 0.0018), inventory management period (β = 0.012, p = 0.0089), and cash conversion cycle (β = 0.004, p = 0.0044) each exerted a positive and statistically significant effect on ROA, while accounts receivable period was insignificant (p = 0.894). The study concludes that disciplined extension of supplier-payment terms, sustained strategic inventory levels, and a measured cash conversion cycle are the empirically validated drivers of productivity, and recommends that brewery firms institutionalise these three levers while overhauling receivables policies.