Effect of Financial Management Practices on Firm Performance of Selected Manufacturing Companies in Nigeria

Abstract

The study examined the impact that sound financial management practices have on the overall performance of manufacturing companies in Nigeria. In this study, an ex-post-facto research strategy was used, and secondary data was collected so that the researchers could investigate the link between the variables. The population of the research was made up of five samples that were randomly chosen from the population as a whole. The information was taken from the company's annual financial report, which covered a period of ten (10) years (2010-2020). Ordinary Least Square (OLS) regression analysis was used in order to make sense of the gathered information. It was discovered that financial management practices have a positive significant effect on Profit after tax (PAT) (p0.0021); financial management practice has a positive significant effect on retained earnings (p0.0415); however, financial management practice has no significant effect on debt-to-equity (p>0.7350). These findings were derived from the findings of the research. The research concluded that there is a considerable positive association between effective financial management practice, profit after tax, and retained profits. This relationship is robust. According to the results, it was suggested that the management of manufacturing organizations should make an effort to place a greater emphasis on the practice of financial management in order to improve the efficacy and efficiency of their operations.