IIARD International Institute of Academic Research and Development

IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH (IJBFR )

E-ISSN 2695-1886
P-ISSN 2672-4979
VOL. 10 NO. 2 2024
DOI: https://doi.org/10.56201/ijbfr.v10.no2.2024.pg156.176

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Liquidity Management and Zombie Firms Status of Listed Non- Finance Firms in Nigeria

G. I Anyanwu, P. Ihejirika, Fortune Bella Charles

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Abstract

The study investigates liquidity management and Zombie firm status by drawing samples from listed non-finance firms in Nigeria from 2012 to 2021. Current ratio, receivable days, and cash conversion cycle are the liquidity management proxies employed in this study while the dependent variable of the study is zombie firm status. Furthermore, the study employed the variables of firm size and market capitalization as the control variables. In this study, the ex-post facto research design is employed. The population of the study consists of all the listed non-finance firms in Nigeria from 2012 to 2021. As of December 2021, we had 109 firms listed on the floor of the Nigerian Exchange Group (NGX) (NGX Factbook, 2021). The sampling technique employed in this study is the filtering sampling technique since firms were included in the sample on certain selection criteria. Logistic regression is employed to test the hypotheses of this study. Based on the findings of the study, we conclude that a 1% increase in the current ratio will lead to about 1% insignificant increase in interest coverage ratio and thus decreasing zombie status of the firms during the period under investigation. The study also concludes that a 1% increase in the receivable days will lead to about 1% significant decrease in interest coverage ratio and thus increasing zombie status of the firms during the period under investigation. Finally, we conclude

keywords:

Liquidity Management, Zombie Firms Status, Non-Finance Firms, Nigeria

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