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This study focuses on the Effect of assets and liabilities on operating performances of listed breweries companies in Nigeria. A proper research was carried out to ascertain the impact of assets or liabilities on the financial performance of listed brewery companies in Nigeria, to evaluate the effect of credit turnover ratio (CTR) on operating performances of listed breweries companies in Nigeria, to assess the influence of Inventory turnover ratio (ITR) on operating performances of listed breweries companies in Nigeria, to examine the impact of cash ration (CR) on operating performances of listed breweries companies in Nigeria, and to investigate the effect of Fixed assets turnover ratio (FATR) on operating performances of listed breweries companies in Nigeria.

The source of data collection used for this study is secondary data. The preliminary stage of this study was essentially collection of data from relevant literature that is from Journals, Publican, Library, internet and annual report of Nigerian and Guinness Breweries Company. In addition, Ten year’s financial report account would be immensely used. One of the conclusions derived from the study of previous research is that that asset and liabilities affect performance of the Nigerian breweries and Guinness breweries Company.


Apart from the telecommunications industry and oil and gas sector, the brewing industry has been the largest source of Foreign Direct Investment (FDI) in the country. Such investment includes Heineken’s investment in Nigeria Breweries Plc. which is its largest investment outside Europe. It also became a major stakeholder in consolidated breweries Plc. with 50.2% (Omolara, 2006). The Nigerian brewery market is currently a 15mhl market and typifies a classic illustration of a duopoly (Ahmed, 2010). Though there are handful marginal players, the market is dominantly driven by Nigerian Breweries Plc. and Guinness Nigeria Plc. with a combined market share of 80%. From a holistic view, this concentration level is much more pronounced when we consider the underlying ownership of the 2 brewers: NB Plc. is majority-owned by Heineken, and Guinness Nigeria Plc. is majority owned by the Diageo Group.

The world brewery market has over the last 5-10 years become increasingly concentrated with a wave of business combinations among brewery giants as well as diversification of investments outside their geographical location. All these are in the quest to dominate the market as well as the maximization of shareholders wealth. Increasing market domination that will enhance the maximization of shareholders wealth depends largely on certain firm specific factors such as persistent profitability. Profit maximization for any firm depends on efficient management of cost and process of production as well as increases in sales resulting from firm’s market domination. One factor that is deduced to influence firm profitability grossly is the firm’s working capital.

In manufacturing firms, current assets account for more than half of its total assets. Excessive levels of current assets can easily result in a firm realizing a substandard return on investment, however, when the level of current assets is low the firm may incur shortages and its operations will be affected, Horne and Wachowiz (2005). The firm is responsible to pay off its current liabilities as and when they fall due. Efficient working capital management controls current assets and liabilities in a manner that eliminates the risk of inability to meet the short term obligations and avoid excessive investment in current assets.

This management of short-term assets is as important as the management of long-term financial assets, since it directly contributes to the maximization of a business’s profitability, liquidity and total performance. Consequently, businesses can minimize risk and improve the overall performance by understanding the role and drivers of working capital (Lamberson, 2006). It is important that a firm preserves its liquidity to enable it meet its short term obligations when due. Increasing profits at the cost of liquidity exposes a company to serious problems like insolvency and bankruptcy. While on the other hand, too much working capital results in wasting cash and ultimately the decrease in profitability (Chakraborty, 2008). Liquidity is thus also very important for a company. A tradeoff between these two objectives of the firms should be obtained so as to ensure that one objective is not met at cost of the other yet both are equally important. If a firm does not care about profit, it cannot survive for a longer period. On the other hand, if it does not care about liquidity, it faces the problem of insolvency or bankruptcy. For these reasons working capital management should be given proper consideration for this will ultimately affect the profitability of the firm.

This management of short-term assets is as important as the management of long-term financial assets, since it directly contributes to the maximization of a business’s profitability, liquidity and

Business organizations are viewed as an essential element of a healthy and vibrant economy. They contribute significantly to the economic growth and sustainable development through employment generation and poverty alleviation globally. In Nigeria, manufacturing companies have been witnessing distressed syndrome due to poor management of working capital. In line with this view, Studies reveal that many business organizations have moribund, some have left the country to other Africa countries for their survival, while surviving ones in the country are still thinking of mergers and acquisitions due to liquidity problem syndrome (Salawu & Alao, 2014; Lawal, Abiola & Oyewole, 2015).

Working capital management has been identified by scholars, researchers and accountants as a panacea to organizational survival in a global competitive environment. Eya (2016) argues that working capital management is a vital part of business investment which is essential for continuous business operations. Angahar and Alematu (2014) also affirm that efficient working capital management is crucial to the financial performance of firms of all sizes and it also serves as an important indicator of sound financial health of firms. In the same vein, Padachi (2006) asserts that the management of working capital is important to the financial health of firms of all sizes. Sanusi (2006) also supports the previous studies that working capital is a life blood of business organizations because it serves as a pool of liquid assets which provides a safety cushion to creditors. It provides a liquid reserve with which to meet contingencies and the ever present uncertainty regarding a company’s ability to balance its cash outlay with an adequate inflow of funds. In the view of Akinlo 2011), a poor or inefficient working capital management leads to tying up funds in idle assets and thereby reducing the liquidity and profitability of a company.

Eya (2016) defines working capital as the funds locked up in materials, work in progress, finished goods, receivables, and cash and cash equivalent. Falope and Ajilore (2009) also see working capital as the excess of current assets that has been supplied by the long-term creditors.


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