THE EFFECT OF LIQUIDITY ON THE PERFORMANCE OF LISTED MANUFACTURING COMPANIES IN NIGERIA.

Authors

  • Eberechi, Henry Wofuru

Keywords:

Liquidity; Performance; Current ratio; Quick ratio; Cash Conversion ratio; Manufacturing

Abstract

In order to attain profitability, businesses need to have enough liquidity because short-term creditors will negatively rate their credit if they don't pay their obligations on time. This study investigated the effect of liquidity on the performance of listed manufacturing companies in Nigeria. In order to evaluate the relationship, the study used an explanatory research approach and data from audited financial statements of sixteen manufacturing companies in the consumer products industry between 2009 and 2018. The collected data were analysed using SPSS and E-View. The study employed panel multiple regression to analyse the data. The study discovered a noteworthy negative correlation between the fast ratio and the performance of manufacturing enterprises that are listed. In contrast, the cash conversion cycle and current ratio are unimportant. The study shows that liquidity has a significant impact on the performance of manufacturing enterprises in Nigeria. However, the Nigerian manufacturing companies were not able to sustain their levels of liquidity in a profitable manner. The study recommends that manufacturing companies establish and strictly adhere to rules and procedures that support the company in maintaining a healthy balance between profitability and liquidity.

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Published

2024-05-28

How to Cite

Henry Wofuru, E. . (2024). THE EFFECT OF LIQUIDITY ON THE PERFORMANCE OF LISTED MANUFACTURING COMPANIES IN NIGERIA. BW Academic Journal. Retrieved from https://bwjournal.org/index.php/bsjournal/article/view/1906

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