IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 11 NO. 3 2025
DOI: 10.56201/jafm.vol.11.no3.2025.pg186.196

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Inventory Flow Management and Profitability of Quoted Food and Beverage Manufacturing Firms in Nigeria

Dr Innocent Ezinwene Chinda, Dr Eunice Ralph Court

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Abstract

This study examines the impact of inventory flow management on financial performance in the Nigerian food and beverage manufacturing sector. Using an ex-post facto research design, secondary data from sixteen listed firms on the Nigerian Stock Exchange (NSE) between 2017 and 2021 were analyzed. The study employs bivariate regression to assess the relationship between Economic Order Quantity (EOQ) and Return on Assets (ROA), as well as Inventory Turnover (ITO) and Return on Equity (ROE). The findings indicate that EOQ has a significant positive effect on ROA (? = 1.405, p = 0.016), suggesting that optimal inventory management enhances asset efficiency and profitability. Conversely, ITO exhibits an insignificant negative relationship with ROE (? = -0.501, p = 0.384), implying that frequent inventory turnover does not necessarily improve shareholder returns. These results emphasize the importance of inventory optimization in driving firm performance while highlighting the need for complementary financial strategies to enhance overall profitability. The study contributes to inventory management literature by demonstrating how EOQ influences asset utilization, while also cautioning against over-reliance on turnover rates as a sole determinant of financial success.

keywords:

Inventory flow management, Economic order quantity, Inventory turnover, Financial

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