ABSTRACT

This study assessed the effect of liquidity management on financial performance of listed consumer goods firms in Nigeria Purposive sampling technique was adopted and Guinness Nigeria Plc. was chosen as a case study. The study was specifically designed to examine the effect of liquidity management proxy by liquidity ratio on return on assets and return on equity. The study adopted the ex-post facto research design. Data on financial performance of manufacturing firms and liquidity ratios were sourced from annual reports and accounts of Guinness Nigeria Plc. and the data contained time series data spanning from 2011 to 2020. Simple regression analysis was employed to analyse the data using the Statistical tool for Social Sciences (SPSS) version 20. The results of the analysis revealed that liquidity management has a significant positive effect on return on asset. The study also found that liquidity management has a significant positive effect on return on equity. Based on the findings, the study recommends that Heads of operations in the listed consumer goods firms should closely monitor their liquidity so as to arrive at the optimum which would maximize their profit. Listed consumer goods firms should only grant viable loans so as to avoid liquidity crisis which usually results to distress. Also, it is recommended that listed consumer goods firms should strengthen their internal control system and enshrine good corporate governance to avoid insolvency.