International Journal of Commerce and Management Studies (IJCAMS) Vol.4, Issue 4, Dec 2019 www.ijcams.com 1 Working Capital Management –Performance Relationship: A Study of Small and Medium Enterprises in Akure, Nigeria Simon-Oke, O.Olayemi Department of Economics, Federal University of Technology, P.M.B 704, Akure, Nigeria E-mail: oosimon-oke@futa.edu.ng; Mobile No: +2348037734653 Abstract Despite the available potentials for sustainable growth and development of Small and Medium Enterprises (SMEs) especially in developing economies, poor management of working capital has continued to deny most SMEs the optimum performance needed to annex the inherent potentials in the business. The study therefore seeks to investigate the relationship between management of working capital and Performance of small and medium enterprises; assess various sources of financing working capital; evaluate working capital management and identify problems associated with the management of working capital of SMEs in Akure, Nigeria. The study adopted descriptive survey with primary source of data collection through a well- structured questionnaire, to elicit information from randomly selected respondents. Both the descriptive and inferential statistics were used for the analysis. The study discovered a significant and positive relationship between working capital and performance of SMEs; identified bank loan, loan from family members and friends, and personal savings as major sources of financing working capital. The study also revealed cash as mostly used of all other working capital components while ineffective management of cash appeared to be most worrisome of all the problems associated with working capital management in the study area. The study concluded that effective working capital management ensures that SMEs have enough funds for day to day running of the business, which suggests consideration for other sources of financing working capital such as cooperative societies among others, for optimum performance needed by SMEs to annex the potentials for sustainable growth and development. Keywords: Working Capital, Management, Performance, Relationship, SMEs, Akure- Nigeria JEL Classification: L25, L26, L53, M21 1. Introduction The existence of large corporations in today’s business environment are off-shoot of Small and Medium Enterprises that have contributed to the expansion of national outputs through value addition to the manufacturing sector, and constitute the major breakthrough in several emerging sectors, which also form most of the businesses in Nigeria. Generally, Small and Medium-Scale Enterprises (SMEs) also known as small and medium enterprises or small and medium-sized businesses (SMBs) (Wikipedia, 2016), are privately owned organizations set-up for the purposes of producing goods or services for profit maximization (Ohachosim, 2014).The abbreviation "SME" is being used by the European Union and international organizations such as World Bank, United Nations, OECD and the World Trade Organization (WTO) among others. As good as this definition appear to be, it only tells us the type of ownership (private) as well as the general reason why business is usually conceived. It does not inform us about the size of the business as well as the capital need of the business that fall into the category of business concern. This is because there is no general agreement on the standard to measure these characters of business. In facts, Ohachosim (2014) observed that there is no universal