Acta Universitatis Danubius. Œconomica, Vol 15, No 2 (2019)

Abstract

This study examined the effect of credit management on the profitability growth as a measure of manufacturing firms growth in Nigeria. The secondary data used were gathered from the financial statements of the selected quoted manufacturing firms and panel data regression technique was used for the analysis. The result revealed that cash conversion cycle and collection period were positively related with the manufacturing firms growth and a negative relation was discovered between the payment period and the manufacturing firms’ growth measured by profitability growth of the selected manufacturing firms in Nigeria; credit management positively influenced the growth of Dangote Cement Plc, Guinness Nigeria Plc and Nestle Plc by 3736883, 6711107 and 4874352 while, the adopted credit management hindered the growth of Cadbury Plc and A. G Leventis Plc by 2926987 and 1031134. Based on the findings, the study concluded that the compliance of the manufacturing firms to credit management such as timely response to cash conversion cycle and collection period would enhance the growth of the manufacturing firms; payment period adopted by the manufacturing firms in Nigeria had hampered their growth and sustainability; the cash conversion cycle had great influence thereby enhanced the growth of manufacturing firms in Nigeria; credit management influenced the growth of Dangote Cement Plc, Guinness Nigeria Plc and Nestle Plc and hindered the growth of Cadbury Plc and A. G Leventis Plc in Nigeria. Therefore, this study recommended that manufacturing firms particularly Cadbury Plc and A. G Leventis Plc should establish and continuously update their credit policies that clearly outlined the management’s view of the organization growth priorities; the manufacturing firms should engaged competent and qualified personnel in other to ensure optimal decision and enshrined strict adherence to collection and payment period.