Liquidity Management and Financial Performance of Selected Oil & Gas Companies in Nigeria

Babalola Chinyere Clare; Adejuwon Joshua Adewale

doi:10.56201/jafm.vol.12.no1.2026.pg247.265

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Liquidity Management and Financial Performance of Selected Oil & Gas Companies in Nigeria

Babalola Chinyere Clare, and, Adejuwon Joshua Adewale

Abstract

This study examined the effect of liquidity management on the financial performance of selected oil and gas companies in Nigeria. The aim of the study was to determine how liquidity indicators influence performance outcomes. Specifically, the objectives were to assess the effect of current ratio and cash management on return on assets and return on equity of the selected firms. A quantitative research design was adopted using secondary data extracted from the published annual reports of five listed oil and gas companies in Nigeria for a ten-year period (2014–2023). Descriptive statistics, correlation and multiple regression analyses were employed for data analysis. The findings revealed a positive and statistically significant relationship between liquidity management and financial performance, with the regression result showing R = 0.742, R2 = 0.551 and p-value < 0.05, indicating that liquidity indicators explained about 55.1% variation in financial performance. The study concluded that effective liquidity management enhances profitability and financial stability of oil and gas firms. It was recommended that companies should maintain optimal liquidity positions, strengthen cash management policies, ensure efficient receivables control and continuously monitor liquidity levels to sustain profitability and corporate growth.

Keywords

Financial PerformanceLiquidity ManagementOil and Gas SectorProfitabilityNigeria Word count: 189

References

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Liquidity Management and Financial Performance of Selected Oil & Gas Companies in Nigeria

Abstract

Keywords

References

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