INVENTORY MANAGEMENT AND FINANCIAL PERFORMANCE OF SELECTED QUOTED SERVICE FIRMS IN NIGERIA

A well managed inventory system plays an important role in the in determining the survival and efficiency of every organization. This study examines the effect of inventory management on financial performance in the Nigerian service sector. The study adopts the explanatory research design with sample of four (4) firms drawn purposively from the thirty two (30) firms listed under Service sector of the Nigerian Stock Exchange. Data sourced from the annual financial reports of the selected firms were analyzed using the ordinary least square regression analysis method. Hypotheses were tested at 5% level of significance. The finding establishes that there is a moderate positive linear relationship, although non-significant, between the independent variable (inventory turnover) proxy for inventory management and the dependent variable (profit after tax) proxy for financial performance. The study recommends that inventory management be taken with keen attention if service firms are to maximize its positive effect on performance.