Analysis of Working Capital Dynamics versus Oil and Gas Firms’ Financial Performance

Abstract

This study investigates the effects of working capital management on financial performance in oil and gas firms. The longitudinal research design was used. The secondary source of data was sourced from the Nigerian Exchange Group (NGX) as at 31^st December, 2022 for various years. The Ordinary Least Squares (OLS) estimation technique method was adopted for analysis with the aid of the E-views (9.0) software. Findings obtained showed that WCFP and WCIP have positive and significant relationship with ROCE and a negative and significant relationship with ROCE The study thus concludes that only WCFP, and WCIP are good predictors of financial performance. This study thus recommends that companies should ensure that the cash conversion sequence is systematically monitored to avoid idle cash balances, occurrence of cash shortages as well as cash theft by employees.

Keywords: Capital Management, Financial Performance, Inventory, and Profitability.