Effect of Cash Conversion Cycle on the Profitability of Public Listed Insurance Companies

Nwude, E. Chuke and Agbo, Elias Igwebuike and Christian Ibe-Lamberts3, Christian Ibe-Lamberts (2018) Effect of Cash Conversion Cycle on the Profitability of Public Listed Insurance Companies. International Journal of Economics and Financial Issues, 8 (1). pp. 111-117. ISSN 2146-4138

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Cash conversion cycle (CCC) constitutes a powerful metric for discovering how efficiently a company manages its working capital. A company that possesses low CCC is more efficient as it turns its working capital over many times in one year and allows it to generate more sales for the cash invested. This paper sets out to investigate the effect of CCC on the return on assets (ROA) of selected Nigerian quoted insurance firms for the period (2000–2011). The ROA is used as a measure of profitability. Data were collected from the annual financial reports of sampled insurance companies. Multiple regression technique was used in analyzing the model for testing the hypotheses. ROA was used as the dependent variable. While CCC was presented as the explanatory variable, current ratio, debt asset ratio, fixed financial total asset ratio, Growth and Size were all incorporated in the model as control variables. The results indicated that CCC had negative and significant effect on profitability. Based on the findings, the study recommends that Nigerian insurance companies should endeavor to reduce their number of days in CCC always in order to enhance their profitability.

Item Type: Article
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HJ Public Finance
Divisions: Faculty of Management and Social Sciences
Depositing User: mrs chioma hannah
Date Deposited: 26 Apr 2019 12:32
Last Modified: 26 Apr 2019 12:32
URI: http://eprints.gouni.edu.ng/id/eprint/1338

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