ASSESSMENT OF THE IMPACT OF ACCOUNTS RECEIVABLE MANAGEMENT ON THE PROFITABILITY OF SELECTED QUOTED CEMENT COMPANIES IN NIGERIA.

Abstract

The study assessed the impact of accounts receivable management on the financial performance of selected quoted cement companies in Nigeria. This study is of paramount importance because many companies today are struggling to survive. The trade-off theory was used as the underpinning theory highlighting the relationship between account receivable, debt and profitability. ey variables investigated include accounts receivables, debt management and profit afteKr tax, utilizing secondary data sources for reliability and compliance with the Companies and Allied Matters Act 2020. The study employed an ex-post facto research design and used secondary source of data collect, deriving the data from the annual reports of three selected companies (Lafarge, Dangote, and BUA Cement Nigeria Plc) over a ten-year period (2014-2023). Data derived for the study were analyzed using panel regression technique. The findings from the study discovered that effective accounts receivable management impacts profitability significantly, depicting a positive relationship between prompt collection and profit margin. Conversely, an elevated debts level will negatively affect financial performance, highlighting the importance for caution in the management of financial leverage. Based on the findings, it is recommended that a robust accounts receivable management strategy be implemented by cement companies in addition to systematic monitoring and timely collection of receivables in order to enhance liquidity and profitability; and maintaining a watertight debt management system to protect the overall future financial health of the companies. This study is of paramount importance because many companies today are struggling to survive.