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Liquidity Management Strategies and Financial Performance of Listed Manufacturing Companies in Nigeria

Daniel, Ukeme Ezekiel, Mrs. Eno G. Ukpong PhD, Uwem E. Uwah FCA PhD

Abstract

This study examined the effect of liquidity management strategies on the financial performance of listed manufacturing companies in Nigeria. Specifically, it assessed the effects of cash management, inventory management, and accounts receivable management on net profit margin. The study adopted an ex post facto research design and used secondary data obtained from the annual reports and audited financial statements of 19 listed manufacturing companies over the period 2016–2025, yielding 190 firm-year observations. Panel data regression techniques were employed, with descriptive statistics, correlation analysis, and diagnostic tests conducted to ensure the reliability of the estimates. The findings revealed that cash management had a positive and significant effect on net profit margin (β = 6.234, p = 0.016), while inventory management also had a positive and significant effect (β = 1.234, p = 0.001). In contrast, accounts receivable management had a negative and significant effect on net profit margin (β = −0.038, p = 0.001). The study concludes that effective management of liquidity resources is essential for enhancing the profitability of listed manufacturing companies in Nigeria. It recommends that firms maintain adequate cash reserves, improve inventory control, and strengthen credit and collection practices to optimize liquidity and financial performance.

Keywords

Liquidity managementcash managementinventory managementaccounts receivable managementfinancial performancenet profit marginmanufacturing companies. JAFM JAFM JAFM

References

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