CASH CONVERSION CYCLE AND VALUE OF LISTED AGRICULTURAL FIRMS IN NIGERIA

Cash conversion cycle is a vital component of the firm that requires proper planning and management which involves decisions about different aspects of cash investment, maintenance of certain level of inventories and managing of account receivable and payable. The study examines the effect of cash conversion cycle on firm value of listed agricultural firms in Nigeria. Payable payment period, receivable collection period and inventory turnover were used to proxy cash conversion cycle; while firm value is proxied with Tobin's Q. The study concentrated on the period from 2010 to 2019. Secondary data was used in other to collect the secondary source of data from the individual financial reports of the listed agricultural sectors. The sample adopted four (4) listed agricultural firms out the five (5) in Nigeria due to the unavailability of data. The study employed regression model to estimate the relationship between cash conversion cycle and firm value. The result shows that payable period has a significant effect on the firm value. The study recommends that the management should seek to delay longer period of account payable. Therefore, the Agricultural companies in Nigeria should try and maintain an adequate period of settling their suppliers in order to avoid negative effect on the company's value. Also, a mechanism should be put in place that will enable debtors settle their accounts on time so as to have a balanced receivable collection period. Finally, the agricultural firms should also seek knowledge on the use of stock optimization techniques so as to be able to determine right quantities of stocks to hold.