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Impact of Working Capital Management Exercises on Financial Decision-Making Skills among Accounting Education Students in Nigeria

Abstract

Working capital management is an important component of financial management because effective management of current assets and current liabilities influences liquidity, operational efficiency, profitability, and short-term financial decision-making. Accounting education students therefore need practical skills to analyse cash, receivables, inventory, payables, and other working capital components and use financial information to make appropriate short-term financial decisions. However, conventional approaches to teaching working capital management may emphasize theoretical concepts and routine calculations without providing sufficient opportunities for students to apply working capital principles to realistic business situations. Working Capital Management Exercises provide students with structured opportunities to analyse working capital data, calculate relevant financial measures, identify liquidity problems, evaluate alternative strategies, and make evidence-based financial decisions. Against this background, this study investigates the impact of working capital management exercises on financial decision-making skills among accounting education students in Nigeria. The study will be anchored on Experiential Learning Theory, Constructivist Learning Theory, and Bloom's Revised Taxonomy. Experiential Learning Theory emphasizes learning through concrete experience, reflective observation, abstract conceptualization, and active experimentation, providing a suitable framework for students' engagement with practical working capital activities. Constructivist Learning Theory emphasizes active participation, problem-solving, prior knowledge, and knowledge construction through meaningful learning experiences. Bloom's Revised Taxonomy emphasizes the development of higher-order cognitive abilities, particularly applying, analysing, evaluating, and creating, which are essential for interpreting working capital information and making appropriate financial decisions. Collectively, these theoretical perspectives provide a suitable framework for explaining how working capital management exercises may influence students' financial decision-making skills. The study will adopt a quantitative quasi-experimental or analytical cross-sectional research design. The study population will comprise undergraduate accounting education students enrolled in selected public and private universities across Nigeria. A multistage sampling technique will be used to select geopolitical zones, states, universities, faculties or departments, levels of study, and eligible accounting education students. Working capital management exercises will be assessed using indicators such as frequency of practical activities, cash management exercises, receivables management, inventory management, payables management, working capital cycle analysis, operating cycle analysis, cash conversion cycle analysis, liquidity analysis, current ratio, quick ratio, working capital turnover, inventory turnover, receivables turnover, collection-period analysis, payment-period analysis, cash-flow forecasting, short-term financing decisions, credit policy analysis, cash budgeting, working capital forecasting, scenario analysis, spreadsheet-based activities, accounting software, case studies, simulations, group exercises, lecturer guidance, feedback, reflection, and opportunities for repeated practice. Students' financial decision-making skills will be assessed using indicators such as identification of liquidity problems, interpretation of working capital information, evaluation of cash-management alternatives, assessment of credit policies, receivables decisions, inventory decisions, supplier-payment decisions, short-term financing decisions, cash budgeting, resource allocation, risk assessment, evaluation of profitability and liquidity trade-offs, comparison of financial alternatives, evidence-based reasoning, problem-solving, professional judgement, and ability to justify short-term financial decisions using relevant accounting and financial information. Data will be collected using structured questionnaires, standardized financial decision-making skills tests, working capital analysis tasks, case studies, financial decision-making scenarios, spreadsheet exercises, competency-based assessment rubrics, observation checklists, and pre-test and post-test assessments where a quasi-experimental design is adopted. Descriptive statistics will be used to summarize students' demographic and academic characteristics, working capital learning experiences, practical exercise exposure, and levels of financial decision-making skills. Inferential statistical techniques, including chi-square tests, paired and independent t-tests, correlation analysis, and multiple regression analysis where appropriate, will be used to determine the impact of working capital management exercises on students' financial decision-making skills. Where a quasi-experimental design is adopted, financial decision-making skill scores before and after exposure to working capital management exercises may be compared with those of a comparison group receiving conventional financial management instruction to determine changes associated with the intervention. Diagnostic tests will also be conducted to assess the reliability, validity, and robustness of the findings. The study is expected to find that working capital management exercises have a significant positive impact on financial decision-making skills among accounting education students in Nigeria. Students who regularly engage in structured working capital exercises are expected to demonstrate stronger abilities to analyse liquidity, evaluate cash-management strategies, assess receivables and inventory decisions, examine supplier-payment alternatives, and make appropriate short-term financing decisions than students exposed primarily to conventional lecture-based instruction. Practical exercises may help students understand the trade-offs between liquidity and profitability and recognize how decisions relating to cash, inventory, receivables, and payables affect organizational financial performance. Cash-flow forecasting and cash budgeting activities may strengthen students' ability to anticipate financial needs and identify potential liquidity challenges. Case studies and scenario-based exercises may further develop students' analytical reasoning, problem-solving, professional judgement, and ability to evaluate alternative financial decisions under changing business conditions. Spreadsheet-based exercises and accounting software may strengthen students' digital financial-analysis skills and ability to process working capital information efficiently. However, inadequate access to financial-analysis technologies, limited availability of realistic business data, insufficient lecturer training, large class sizes, limited instructional time, and students' varying levels of quantitative competence may reduce the effectiveness of working capital management exercises. The study therefore expects structured, practical, technology-supported, and well-supervised working capital management exercises to contribute significantly to improved financial decision-making skills among accounting education students in Nigeria. The study is expected to contribute to the literature on working capital management exercises, financial decision-making skills, accounting education, financial management education, experiential learning, constructivist learning, higher-order thinking, practical accounting competence, financial analysis, accounting pedagogy, and higher education in Nigeria. The findings will provide useful information to the National Universities Commission, universities, accounting education departments, accounting educators, professional accounting bodies, accounting firms, employers, curriculum developers, and policymakers regarding strategies for strengthening practical financial management education. The study will also provide evidence-based recommendations for integrating working capital management exercises into accounting and financial management courses, developing realistic Nigerian business cases, strengthening students' practical training in cash, receivables, inventory, and payables management, incorporating spreadsheets and financial-analysis technologies into learning activities, training accounting educators in applied financial management instruction, using competency-based financial decision-making assessments, providing continuous feedback and opportunities for repeated practice, and creating opportunities for accounting education students to develop the financial decision-making competencies required in contemporary organizations in Nigeria.

Keywords: Working capital management exercises, financial decision-making skills, accounting education students, financial management education, liquidity management, cash management, receivables management, inventory management, experiential learning, Nigerian universities, Nigeria.