European Journal of Accounting, Finance and Investment

Investigating The Relationship Between Inventory Management Practice And Financial Performance Of Manufacturing Industry In Nigeria: An Empirical Evidence

Tajudeen T Lawal PhD

Federal Polytechnic, School of Business & Management Studies, Department of Banking & Finance, Ede- Nigeria.

Ajala Olayimika A PhD

Ladoke Akintola University of Technology, Faculty of Management Sciences, Department of Accounting, Ogbomosho-Nigeria.

M O Oladejo PhD

Ladoke Akintola University of Technology, Faculty of Management Sciences, Department of Accounting, Ogbomosho-Nigeria.

Ebenezer A Adebisi

Osun State University, Faculty of Management Sciences, Department of Accounting, Osogbo-Nigeria

Keywords: Inventory management, Financial performance, Simulation, Electronic-inventory

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Abstract

This study evaluates the relationship between inventory management practice and financial performance in Paint manufacturing companies in Nigeria. Inventory management practice remains a vital part of a manufacturing concern to be more competitive, hence its efficient management cannot be over emphasized. Relevant theories were reviewed by the study to provide good theoretical foundation. The study population consists of 09 listed manufacturing companies in Lagos state of Nigeria registered with LCCI and NSE as at 2019 for a period of 12 years (2008-2019). Data was collected through primary and secondary sources which was subjected to diagnostic tests. Both descriptive and inferential statistics were used to analyze the panel data through OLS regression method. Both descriptive and inferential statistical analysis using data collected through cross sectional survey method from primary and secondary sources were employed by the study. Panel data was collected through cross sectional survey method. The results indicated that there is a positive relationship between inventory management practice and financial performance (ROCE & ROE) but a negative relationship with (ROS) of the listed Paint companies in Nigeria. The study recommends that the concerned managers should endeavor to design and monitor procedures for inventory control, improve communications across board, maintain good suppliers’ chain management of the inventory with adequate security while government need to stabilize foreign exchange market to enhance inventory management and enhance sustainable economic growth for the country.