dc.description.abstract | In the fields of marketing as well as financial management, business firms are
increasingly relying on trade credit. Trade credit is useful in business because it can
be used instead of bank credit. Firms may use trade credit to help them forecast
demand for their products or services. “Trade credit assists businesses in developing
client relationships, thereby increasing their sales capacity and profitability;
nevertheless, if not properly handled, trade credit can result in a liquidity crisis. Trade
credit investments can determine credit management practices which have significant
impact on a company’s financial performance. The goal of the study was to see how
trade credit affected the performance of NSE-listed non-financial companies. The
study's population included all 42 NSE-listed non-financial companies. Trade credit,
defined as net sales to average receivables ratio in a particular year, was used as a
predictor variable in this study. The control variables were liquidity assessed by the
current ratio, total assets natural log measuring company size, and management
efficiency measured by the ratio of total revenue to total assets per year. Return on
assets served as the response variable for financial performance. Secondary data was
collected on a yearly basis for five years (January 2016 to December 2020). The
research variables were analyzed using a descriptive design. SPSS software being
utilized to conduct the analysis. The conclusions yielded a 0.333 R-square value,
indicating that variations in the chosen independent variables account for 33.3 percent
of changes in financial performance amongst non-financial firms, whereas other
factors accounting for 66.7% of variance in financial performance amongst NSE listed
non-financial firms. Independent variables had a good relationship with company
performance (R=0.577) in this study. The F statistic was significant at 5% with
p<0.05, according to the ANOVA results. This demonstrated that the overall model
was effective in establishing the variables' relationships. Trade credit had a positive as
well as statistically significant impact on financial performance. Liquidity and
management efficiency also had a positive as well as statistically significant impact
on the performance of the NSE listed non-financial companies. In this research, the
size of the firm had no statistical significance. This suggestion is that NSE-listed nonfinancial
companies should continue offering trade credit, improve liquidity positions,
and improve management efficiency, as the three factors has a substantial influence
on their financial performance.” | en_US |