Liquidity and Efficiency Strategies on Financial Performance; Evidence from Listed Multinational Companies in Nigeria

This study examined the effect of liquidity and efficiency strategies on the financial performance of listed multinational companies in Nigeria. Liquidity and efficiency strategies proxied by liquidity strategy percentage and efficiency strategy percentage with firm leverage (introduced as a control variable) and financial performance, proxied by return on capital employed of listed multinational companies in Nigeria. The ex post facto research design was adopted, with a special emphasis on longitudinal panel studies. The population comprises all 32 listed multinational companies in Nigeria. Secondary data from the annual reports of listed multinational companies were collected, and Panel regression estimation was used for the analysis, with the aid of E-views 13 statistical package. The finding revealed that liquidity strategy percentage has a positive and significant effect on return on capital employed of listed multinational companies in Nigeria, while efficiency strategy percentage also has a positive and significant effect on return on capital employed of listed multinational companies in Nigeria. The study concludes that liquidity and efficiency strategies have a positive and significant effect on the financial performance of listed multinational companies in Nigeria. The study, therefore, recommends that the management of multinational companies listed on the Nigerian exchange group should establish rules and policies that support an effective liquidity and efficiency strategy to ensure continuous cash reserves and lessen liquidity problems and financial sustainability.