Effect of Liquidity Management on Financial Performance of Nigerian Consumer Goods Manufacturing Firms

Talatu K. Bagana, Dr. Saheed A. Lateef and Prof. Emeka E. Ene
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Talatu K. Bagana: Accounting and Finance Department, Faculty of Management and Social Sciences, Baze University Abuja, Nigeria
Dr. Saheed A. Lateef: Accounting and Finance Department, Faculty of Management and Social Sciences, Baze University Abuja, Nigeria
Prof. Emeka E. Ene: Accounting and Finance Department, Faculty of Management and Social Sciences, Baze University Abuja, Nigeria

International Journal of Research and Scientific Innovation, 2024, vol. 11, issue 6, 210-229

Abstract: The study examined the effect of liquidity management on the financial performance of Nigerian consumer goods manufacturing firms. The study adopted an ex-post facto research design. The study depends wholly on secondary data collected from the annual report of 10 listed consumer goods manufacturing firms on the Nigerian Exchange Group (NEG) from 2018 to 2022. The dependent variable for the study is financial performance which was proxies as return on asset while the independent variables are cash and cash equivalent, cash conversion cycle, quick ratio, current ratio and working capital were as the dependent variable. Panel analysis was used in the study. E-views 12 statistical package was used to analyze the data. The study discovered that cash and cash equivalents exert positive and significant impact on financial performance of consumer goods firms, that there is negative and significant relationship between cash conversion cycle and financial performance of consumer goods in Nigeria, that there is negative and no significant relationship between quick ratio and financial performance of consumer goods firms in Nigeria, that there is positive and significant impact of current ratio on financial performance of consumer goods firms in Nigeria, that there is positive and significant impact of working capital on financial performance of consumer goods firms in Nigeria. The study concluded that liquidity management significantly affects the financial performance of Nigerian consumer goods manufacturing firms. The study recommended that management reduce the magnitude at which they use up cash and its equivalent in settling their short-term obligations to improve their profitability.

Date: 2024
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