INVENTORY MANAGEMENT TECHNIQUES AND FINANCIAL PERFORMANCE OF LISTED TRANSPORTATION AND HOTELS COMPANIES IN NIGERIA

Abstract

This study determined the effect of inventory management on financial performance of transportation and hotels companies in Nigeria. Specifically, the study ascertain the effect of inventory turnover on return on assets of listed transportation and hotels companies in Nigeria, evaluate the effect of operating cycle on return on assets of listed transportation and hotels companies in Nigeria, and determine the effect of inventory conversion period on return on assets of listed transportation and hotels companies in Nigeria. The research adopted survey research design. The population of the study consisted of ten (10) transportation and hotels companies listed on the floor of the Nigerian Exchange Group as at 31^st December 2023. The sampling technique used in this study was purposive (Judgmental) sampling technique. As the name implies, it is a sample “chosen purely on the basis of convenience. Eight (8) listed transportation and hotels companies were chosen simply because as at the time of this research work, two of the companies that are listed in Nigerian Exchange Group formally known as Nigeria Stock Exchange do not have data available. This study adopted descriptive statistics and Ordinary Least Square (OLS) multiple regression with the aid of Microsoft Excel and E-View 10. The results of the findings showed that, there is no significant effect of inventory turnover on return on asset of listed transportation and hotels companies in Nigeria, there is no significant effect of operating cycle on return on assets of listed transportation and hotels companies in Nigeria and finally, there is no significant effect of inventory convention period on return on assets of listed transportation and hotels companies in Nigeria. Therefore, the study concluded that, there is a positive and insignificant effect of inventory management on financial performance of listed transportation and hotels companies in Nigeria. The study recommended that; transportation and hotels companies should develop a policy framework to determine inventory turnover against it profit after tax. This is because the study affirmed that inventory turnover has positive relationship with profit after tax, and firms should evaluate operating cycle when planning to sell and replacing inventories because this study result revealed that it has negative and insignificant relationship with return on assets.