DOES MANAGEMENT OF WORKING CAPITALAFFECTS SMES FINANCIAL PERFORMANCE IN KADUNA METROPOLIS

Extant financial literature has focused more attention on the medium and long-term financial decisions of companies ignoring the importance of short-term decisions. This is more evident from SMEs manufacturing companies. Hence, lack of proper research study on the area gives a chance for Nigeria SMEs managers to have limited understanding on the link between WCM and SMEs financial performance. Thus, this study empirically determines the effect of working capital management on the financial performance of manufacturing SMEs in Kaduna metropolis, Nigeria. The study was conducted on a sample of 9 Kaduna SME's registered with Manufacturing Association of Nigeria (MAN) for a period of six years from 2015 to 2020 which led to a total of 54 firm-year observations. The data were collected from the annual reports and accounts of the sampled companies for the said period. Data were analyzed by means of descriptive statistics to provide summary statistics for the variables and correlation analysis was also carried out using Spearman Correlation technique for the correlation between the dependent and explanatory variables. Ordinary Least Square (OLS) regression was used in testing the study hypotheses using STATA software version 12.00. Findings from the analyses revealed mixed results, where cash management had a positive impact on profitability while account payable management had a negative impact on the profitability of the firms.