Relationship Between Liquidity Management and Deposit Mobilization of Banks in Nigeria (Published)
This study investigates the relationship between liquidity management and deposit mobilization of banks in Nigeria. The study, which examines the impact of liquidity management measures, including the cash-to-current asset ratio, the current ratio, and the cash reserve ratio, expresses a well-founded view that, while both the cash-to-current asset ratio and current ratio do not significantly affect total deposits, the cash reserve ratio shows a significant positive correlation between it and deposits. These results confirm that cash reserves serve as a primary function for depositor satisfaction and contribute to financial stability. According to the results of the study, banks should make it a point to preserve optimum cash reserves to increase deposits while looking into other issues that could be affecting the way they handle liquidity. The study helps to better understand the liquidity management practices in Nigerian banks and gives viable suggestions for compliance by banks and regulators to liquidity management and deposit mobilization strategies. Future research is suggested for the analysis of the effects of other liquidity levels and some macroeconomic factors on mobile deposit funds.
Keywords: Cash Reserve Ratio, Liquidity Management, Nigerian Banks, cash-to-current asset ratio, current ratio, liquidity indicators
Liquidity Management and Gross Earnings of Insurance Firms in Nigeria (Published)
The study appraised liquidity management and gross earnings of insurance firms in Nigeria. During the Covid-19 period, insurance firms were faced with the financial responsibility of indemnifying the numerous risks suffered by policy holders. To do so effectively, they need to be liquid enough so as to meet such indemnity demands as at when due. This affects their investment. Hence the study examines liquidity and gross earnings of insurance firms in Nigeria. Current ratio, cash ratio, and operating cash flow ratio is the independent variables of the study, while the dependent variable is profit for the year. The study adopted an ex-post-facto research design, covering the period between 2011 and 2020. Secondary data were extracted from the annual report and accounts of the sampled insurance companies. The correlation technique was used for the data analysis. In line with the specific objectives of the study which was to examine the relationship between current ratio, cash ratio, and operating cash flow ratio and profit for the year of insurance firms in Nigeria, it was revealed that current ratio has a positive and strong relationship with profit for the year of firms in Nigeria insurance subsector. Cash ratio has a negative and weak relationship with profit for the year of firms in Nigeria insurance subsector. The operating cash flow ratio has a positive and weak relationship with profit for the year of firms in the Nigeria insurance subsector. This implies that an increase in current ratio results in a significant increase in profit for the year of insurance firms in Nigeria. It is recommended therefore that insurance firms in Nigeria should strive to improve their current ratio. They can do this by reducing the personal draw on the business and by reducing the personal drawings on the business. They should reduce their propensity to hold cash. They should balance the trade-off between cash holding and profitable investment. They should make profitable investments and ensure that their liabilities are settled on time. Insurance firms should devise strategies to improve the cash they generate from operating activities. They can do this by improving their inventory, introducing electronic payments, etc.
Keywords: Liquidity Management, Nigeria, Profit for the year, cash ratio, current ratio, insurance firms, operating cash flow ratio, shareholders’ value
Working Capital Management and Profitability of Industrial Goods Sector in Nigeria (Published)
This study investigated the relationship between working capital management and profitability of industrial goods sector in Nigeria. Specifically, the variables of working capital management namely: Cash Conversion Cycle (CCC), Current Ratio (CR), Quick Ratio (QR) and Working Capital Turnover ratio (WCTR) and Return On Assets (ROA) were examined. Firms in the industrial goods sector were selected and their data sourced from the Nigerian Stock Exchange Factbook (2011-2020) and seventy (70) observations were obtained. The study revealed from the regression analysis carried out that a positive linear relationship exist between the variables of working capital management (CCC, CR, QR and WCTR) and ROA. CR was negatively and significantly related with ROA while, CCC and QR was positively but insignificantly related with ROA.WCTR shows a negative and insignificant relationship with ROA when tested at 0.05 level of significance. Based on the findings, it is recommended therefore, that listed industrial goods firms should adopt the management of their short term financial strength in boosting profitability.
Keywords: Profitability, Working Capital Management, current ratio, industrial goods