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Articles

Vol. 14 No. 1 (2024): ESUT Journal of Accountancy (EJA)

Effect of Firms’ Growth Indices on Account Receivable of Food and Beverage Manufacturing Firms in Nigeria

Submitted
June 11, 2024
Published
2024-06-11

Abstract

Research Purpose: Understanding how firms’ growth indices affect accounts receivable is crucial for effective financial management in Nigeria's food and beverage sector. This study evaluates the impact of sales growth, productivity growth, asset growth, and profit growth on accounts receivable.

Methodology: A sample of seven firms, selected from the twenty-two listed on the Nigeria Exchange Group (NGX), was analysed using secondary data from 2012 to 2022. The study utilised Panel Least Square Regression and Durbin Watson Statistics to test hypotheses and check for autocorrelation.

Findings: Sales growth negatively and non-significantly affects accounts receivable (coefficient: -0.000300, p-value: 0.9926). Asset growth positively and non-significantly affects accounts receivable (coefficient: 0.005507, p-value: 0.5655).

Conclusion: The study concludes that sales and asset growth do not significantly impact accounts receivable, highlighting the need for better receivables management to boost sales growth.

Recommendations: Firm managers should improve accounts receivable management to enhance sales growth, which can subsequently increase profitability.

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