The Impact of Effective Management of Credit Sales on Profitability and Liquidity of Food and Beverage Industries in Nigeria

Musa Jibrin

The Impact of Effective Management of Credit Sales on Profitability and Liquidity of Food and Beverage Industries in Nigeria

Musa Success Jibrin * §

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§ Anambra State University

The Impact of Effective Management of Credit Sales on Profitability and Liquidity of Food and Beverage Industries in Nigeria

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Abstract

The study examined the impact of effective management of credit sales on profitability and liquidity of Food and Beverage Industries in Nigeria. The study centered mainly on the effect of each of the individual components of credit sales, profitability, liquidity and activity level of the companies under study which include the credit sales percentage, gross profit margin, net profit margin, return on capital employed, debtors collection period, debtors turnover, acid test ratio and return on current assets. Also the credit policy variables were examined which include credit standards, credit terms and collection policy and procedures. Data were obtained from the Annual reports and Accounts of the selected companies of year (2007-2011). The relevant data were subjected to statistical analysis. Analysis of variance (ANOVA) was used in testing the hypotheses. The study revealed that when credit sales are effectively managed profitability is at a desirable level. Lastly, the finding revealed that when a firm’s debtors turnover is favourable, liquidity is at a desirable level. The researchers recommended that companies should consider their mission, the nature of their businesses and their business environment before setting up a credit policy.

References

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Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

How to Cite This Article

Musa Success Jibrin. . "The Impact of Effective Management of Credit Sales on Profitability and Liquidity of Food and Beverage Industries in Nigeria". Global Journal of Management and Business Research GJMBR Volume 13 (GJMBR Volume 13 Issue 39).

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GJMBR Volume 13 Issue 39

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Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

Keywords

credit policy credit sales debtors turnover food and beverage industries liquidity manufacturing companies Profitability

Classification

GJMBR Classification JEL Code: 350205

Submission ReceivedApril 15, 2013
Peer Review Double Blind
Handling Editor
Accepted May 5, 2013
Published May 15, 2013

Version of record

v1.2

Issue date

November 13, 2013

Language

English

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Article Matrices

Total Score: 155

Country: Nigeria

Subject: Global Journal of Management and Business Research

Authors: Musa Success Jibrin, Dr. M.S.K.Ifurueze, Success Blessing Ejura (PhD/Dr. count: 1)

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Publish Date: 2013 11, Wed

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Total Downloads: 205

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