Liquidity Management and Financial Performance: Evidence from Selected Listed Manufacturing Companies in Nigeria

This study examined the impact of liquidity management on the financial performance of listed manufacturing companies in Nigeria. Employing an ex-post-facto research design, secondary data was utilized to explore the relationship between the variables. The study focused on a population comprising all manufacturing companies listed on the NGX, with a sample of ten (10) companies selected for analysis. Data were extracted from their annual financial reports spanning a ten-year period (2014–2023) and analyzed using multiple regression techniques. The findings revealed that the current ratio negatively and insignificantly affects the financial performance of the selected manufacturing companies, while the cash conversion cycle has a positive but insignificant effect. The study also found that the quick/acid test ratio significantly influences the financial performance of the selected manufacturing companies in Nigeria. Consequently, it recommended that manufacturing firms adopt credit policies aimed at minimizing unnecessary inventory accumulation and implement inventory management strategies that reduce stock investments while enhancing profitability. Additionally, it was advised that manufacturing companies should efficiently manage their cash conversion cycle to optimize returns on investment and amplify its limited positive impact on their performance.