Working Capital in an organization means the availability of liquidity at hand to meet immediate short- term needs, and represents the difference between the current assets and current liabilities of a firm. This research investigated the Impact of Working Capital Management on Financial performance of Firms in Nigeria. The specific objectives were to: examine the effect of debtors’ days on firms’ financial performance and to ascertain the effect of creditors’ days on firms’ financial performance. In line with these objectives, two research questions and two hypotheses were formulated. The statistical tool applied was regression analysis, using the E-view9 package. The study made use of the data obtained from the Annual Reports and Statement of Accounts of some selected quoted manufacturing companies, listed in the Nigerian Stock Exchange. Financial performance indicators used were Return on assets (ROA), Return on equity (ROE) Return on sales (ROS) and earnings per share (EPS). The independent variables were Average payment period (APP) and Average collection period (ACP). Average payment period (APP) was found to be negatively and insignificantly associated with (ROA) and (EPS) in the first and third models respectively, while it is positively and significantly associated with (ROE) and (ROS) in the second and fourth models respectively.  Average collection period (ACP) has a positive and significant impact on (ROA) and (EPS) respectively in the first and third models, while it has negative and insignificant impact on (ROE) and negative and significant effect on (ROS) in the second and fourth models respectively. In conclusion, working capital management is an essential tool in firms’ performance as it has been found that its proper management could add value to firms and save them from insolvency and possible bankruptcy. The right and appropriate mix of variables is advised always to achieve the desired results of a firm. Its absence will result into insolvency, other associated risks and possible bankruptcy of a firm. The study recommends that effective and efficient working capital management policies with the relevant mix of variables should be employed always, and professionally qualified Financial Managers should always be engaged to drive those techniques/policies.

Keywords: Working capital, Working capital management, Firms financial performance, Average collection period(ACP), Average payment period(APP)