MODERATING ROLE OF BOARD EXPERTISE ON THE EFFECT OF WORKING CAPITAL MANAGEMENT ON PROFITABILITY OF FOOD AND BEVERAGES COMPANIES QUOTED IN NIGERIA

Abstract

Working capital management is deciding how to plan and control current assets and obligations, using both aggressive and cautious methods. The main objective is to evaluate the moderating role of board expertise on the effect of working capital management on profitability of food and beverages companies quoted in Nigeria from 2010-2020 The study adopts the ex-post facto research design. The scope of this study cover15 foods and beverages companies for a ten (10) year period from 2010-2020. The population consists of the 23 foods and beverages companies operating in Nigeria. The sample size comprises 14 companies selected from the 15 quoted on the Nigerian stock exchange (NSE) by purposive sampling method which filters out those which do not meet the purpose of this study. The data used for this study were sourced from the various editions of the financial statements of the quoted firms sampled. Robust Generalized least square multiple regression technique was used to model estimation. The findings among others shows that when the time to convert assets to cash for use is longer, the company’s profitability will decrease having a reduction effect on return on assets that will accrue to shareholders. The study recommends among others that Foods and beverages companies should ensure that the set-in motion a buoyant arrangement with their debtor that will help them recover debts without much delay because prolonging the accounts receivable period has a negative effect on profitability.