An Assessment of the Impact of Current Ratio on the Sustainability of Selected Indigenous Oil and Gas Firms in Nigeria

This study explores the role of the current ratio a fundamental measure of liquidity on the sustainability of Nigeria's selected indigenous oil and gas firms. As players in a capital-intensive and highly volatile industry, such firms are likely to face enormous financial stresses that compromise their long-term sustainability. Effective management of liquidity therefore becomes critical not only for operations but also for decision-making as well as stability. Using evidence derived from a purposive sample of indigenous oil and gas companies, the study investigates to what degree variations in current ratio levels influence key measures of sustainability like profitability, expansion of business, and maintaining business operations. Statistical techniques are used to ascertain the strength and significance of such relationships. The findings affirm an optimistic relationship between optimum current ratio levels and improved firm sustainability. Firms with well-managed liquidity positions are better placed to maintain business stability, handle market volatility, and win the confidence of investors and stakeholders. Besides, liquidity also enhances the capacity to exploit long-term investment opportunities and better withstand financial shocks. The study points out that while excess liquidity is likely to result in inefficiencies, inadequate liquidity is likely to leave the firm vulnerable to interruptions in the markets. Based on these findings, the research recommends indigenous oil and gas operators to adopt tough liquidity management strategies, keep a close watch on their current ratio, and harmonize financial planning with sustainability goals. These are necessary measures to enhance competitiveness and the long-term success of indigenous players in the dynamic Nigerian oil and gas market.