Receivables and Payables Management as Predictors of Asset Utilization Efficiency in Industrial Firms in Nigeria

This study examined Receivables and Payables Management as Predictors of Asset Utilization Efficiency in Industrial Firms in Nigeria. The research focused on assessing the effect of Accounts Receivables Ratio and Accounts Payables Ratio on Return on Assets (ROA), a proxy for asset utilization efficiency. Two research questions, objectives, and hypotheses guided the study. Key concepts analyzed include receivables and payables management and their role in optimizing asset performance. A review of relevant empirical literature highlighted mixed findings on the relationship between working capital components and firm performance. An ex-post facto research design was adopted due to the reliance on historical financial data sourced from the annual reports of selected industrial goods firms listed on the Nigerian Exchange Group (NGX) from 2013 to 2024. The dependent variable was Return on Assets (ROA), while the independent variables were Accounts Receivables Ratio and Accounts Payables Ratio. Data analysis was conducted using descriptive statistics, correlation, and multiple regression via Ordinary Least Squares (OLS) technique. The results revealed that Accounts Receivables Ratio had a significant positive effect on ROA, while Accounts Payables Ratio showed no statistically significant effect. It was recommended that industrial firms prioritize efficient receivables management to enhance asset utilization while adopting more strategic approaches to payables management to avoid operational disruptions.