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Liquidity Management and Profitability: A Study of Selected Food and Beverage Companies in Nigeria

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  • Lyndon M. Etale
  • Paymaster F. Bingilar

Abstract

The study examined the impact of liquidity management on profitability of food and beverage companies in Nigeria. The study involved a sample of five (5) food and beverage companies listed in the Nigerian Stock Exchange. Secondary data were obtained from the annual reports and accounts of the selected companies under study for the period 2011-2015.The relevant data were subjected to analysis using descriptive statistical and multiple regression techniques. The results of the study revealed that Cash Ratio (CARAT) and Quick Ratio (QUIRA) have positive and significant relationship with profitability (ROCE) of companies in the food and beverage sector. It was also empirically verified that Cash Conversion Cycle (CACCY) had negative and insignificant relationship with Profitability (ROCE). The researchers recommended that efficient and effective liquidity management policies and procedures should be put in place in order to improve profitability and reduce the risk of corporate failures.

Suggested Citation

  • Lyndon M. Etale & Paymaster F. Bingilar, 2016. "Liquidity Management and Profitability: A Study of Selected Food and Beverage Companies in Nigeria," International Journal of Management Sciences, Research Academy of Social Sciences, vol. 7(4), pages 217-225.
    • Handle: RePEc:rss:jnljms:v7i4p5
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    References listed on IDEAS

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    3. Pandey I M, 1988. "Financial Management Research in India," IIMA Working Papers WP1988-02-01_00807, Indian Institute of Management Ahmedabad, Research and Publication Department.
    4. Sebastian Ofumbia Uremadu & Ben-Caleb Egbide & Patrick E. Enyi, 2012. "Working Capital Management, Liquidity and Corporate Profitability Among Quoted Firms in Nigeria Evidence from the Productive Sector," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 2(1), pages 80-97, January.
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    1. repec:arp:sjefsm:2021:p:25-34 is not listed on IDEAS
    2. Gideon Tayo AKINLEYE & Joseph Segun OGUNLEYE, 2019. "Liquidity and The Profitability of Manufacturing Firms in Nigeria," Applied Finance and Accounting, Redfame publishing, vol. 5(2), pages 68-73, August.

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