TO GET THE COMPLETE JOURNAL/THESIS FOR TOPIC BELOW,
CALL: 08168759420, 08068231953
WHATSAPP: 08137701720
THE IMPACT OF INVENTORY MANAGEMENT ON THE PROFITABILITY OF MANUFACTURING COMPANIES IN NIGERIA
Abstract: Inventory constitutes a major segment of total investment in manufacturing companies, therefore its management remains very crucial. This study therefore examines the effect of Inventory Management on the profitability of the manufacturing industry. The objectives of the study are to examine the effect of Inventory management on return on asset, investment, net operating margin, and net income of manufacturing firms in Nigeria using manufacturing companies in food and beverages operating in Nigeria as at the time of this study. This study employed the ex-post facto research design and covered a period of 5years from 2015 – 2019. Both descriptive and inferential methods of data analysis were employed. The study reveals that inventory management has significant effect on return on asset, investment, net operating margin, and net income of manufacturing firms in Nigeria. Based on the findings of this study, the following recommendations were proffered: management should avoid tying down of capital on inventory by employing Just-in-Time (JIT) system of inventory; they should also reduce credit sales or average collection period for easy conversion of inventory to cash. This will enable companies to have enough cash to settle their obligations as at when due; the companies should maintain a closer watch on their inventory conversion period by constantly reviewing processes of payment by creditors so to avoid liquidation. and professionals in the field of inventory management should be hired by these companies for advice.
Keywords: Inventory Management, Profitability, Manufacturing Companies, Liquidity