Responsiveness of Operational Performance to Liquid Asset Management of Industrial Goods Firms in Nigeria (Published)
The study examined the responsiveness of operational performance to liquid asset management of industrial goods firms in Nigeria. inventory, cash and cash equivalents, and account receivables formed the independent variables of the study. While profit for the year was used to measure operational performance. The study adopted an ex-post-facto research design, covering the period between 2011 and 2020. Secondary data were extracted from annual reports and accounts of sampled industrial goods firms listed on Nigeria Exchange Plc. Multiple regression techniques (fixed-effect model) was used for the data analysis. In line with the specific objectives of the study which was to ascertain the effect of inventory, cash and cash equivalents, and account receivables on profit for the year of industrial goods firms in Nigeria, it was revealed that inventory and cash and cash equivalents have a negative and significant effect on profit for the year of industrial goods firms in Nigeria. Account receivables have a positive and insignificant effect on profit for the year of industrial goods firms in Nigeria. This implies that non of the independent variables have a significant effect on the operational performance of industrial goods firms in Nigeria. It is recommended therefore that industrial goods firms should strive to reduce the rate at which they sell their inventory at a loss. They should devise a means to resist sell pressures caused by importations. The government should also help in protecting the firms within these industries by placing importation embargos on industrial goods. Industrial goods firms should reduce the amount of cash and cash equivalents they hold. They should strive to reduce the idle cash at their disposal. Such cash should be invested into the business that will yield good returns. They should always strive to increase their account receivables because of the positive effect it has on operational performance.
Citation: Mbah, A. U & Okwo I M. (2022) Responsiveness of Operational Performance to Liquid Asset Management of Industrial Goods Firms in Nigeria, European Journal of Accounting, Auditing and Finance Research, Vol.10, No. 12, pp.14-28
Keywords: Inventory., Nigeria, Profit for the year, account receivables, cash and cash equivalents
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