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.
Liquidity Management and Corporate Sustainability of listed Oil and Gas Companies: Empirical Evidence from Nigeria (Published)
Investors had watched the fragile state of corporate sustainability of the oil and gas companies, as huge capital investments had been lost due to the unpredictable nature of prices occasioned by the unstable foreign exchange rate. Studies have shown that profitability, assets growth and economic value added expectations of investors rely on skillful and efficient management of the companies’ resources especially, liquidity management, which were considered inadequate. Consequently, the study investigated the effect of liquidity management on corporate sustainability of the oil and gas companies in Nigeria.The study explored ex-post facto research design. The population consisted of 13 listed oil and gas companies listed on the Nigerian Stock Exchange as at 31st December 2017. Ten oil and gas companies were selected using purposive sampling technique. Data were extracted from published financial statements of the sampled companies, while the validity and reliability of the data were premised on the scrutiny and certification by the external auditors. Descriptive statistics and inferential statistics were used for the data analysis.The study revealed that corporate sustainability of quoted oil and gas companies in Nigerian was significantly affected by liquidity management. Results showed that liquidity management had a positive significant effect on profitability, F-Statistics (4, 95) = 3.493; AdjR2 = 0.092; P-value = 0.010; while liquidity management also exhibited a positive significant effect on assets growth, F-Statistics (4, 95) = 0.3.030; AdjR2 = 0.076; P-value= 0.021. Also, liquidity management exhibited a positive significant impact on economic value added. F-Statistics (4, 95) = 2.598; AdjR2 = 0.054; P-value = 0.035. When the control variable was introduced, the results revealed that liquidity management had a positive significant effect on profitability, F-Statistics (5, 94) = 3.020; AdjR2 = 0.093; P-value = 0.014; while liquidity management also exhibited a positive significant effect on assets growth, F-Statistics (5, 94) = 2.488; AdjR2 = 0.070; P-value= 0.037. Also, liquidity management exhibited a positive significant impact on economic value added. F-Statistics (5, 94) = 4.683; AdjR2 = 0.159; P-value = 0.001.The study concluded that liquidity management affected corporate sustainability of quoted oil and gas companies in Nigerian. The study recommended that shareholders, managers, policy makers, financial regulators and market participants should be mindful of companies’ liquidity management and time lag between credit sales and collection of receivables as critical to the corporate sustainability companies. Managers should revisit cash conversion cycle policy time-lag, and ensure effective resource management because of their importance to corporate sustainability.