Nexus Of Liquidity Management And Corporate Business Failures In Non –Financial Sectors’ A Case Of Nigeria
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Date
2019-10
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
EJBMR, European Journal of Business and Management Research
Abstract
management – a key survival strategy of listed
companies on the Nigeria Stock Exchange Markets and
retrospectively assessed the salient variables on delisted
corporate firms in Nigeria. Data were randomly collected from
ten companies each from 114 listed and 82 delisted companies
on the Nigeria stock exchange market records from January
2016 to 31st December, 2018 - healthy listed companies and
2006 -2008 for delisted records of failed companies. In all,
twenty companies were analysed with two-tailed test using a
significance level of 0.05 to test the possibility of the
relationships, The existence of a positive relationship between
liquidity management and profitability of corporate firms in
Nigeria were established as the result of the study showed that
adequate liquidity management spurs rapid cash growth,
effective operating activities and profit making propensity of
corporate healthy businesses which invariably were lacking in
the delisted companies and resulted into eventual failure. Also,
a higher cash flow from operations reduce the chance of a firm
growing resulting into eventual liquidation. Cash flow from
investing activities is however seen as a factor that exert a
positive influence generally on corporate businesses in Nigeria.
The study concluded that ill management of business liquidity
is the major cause of failure of corporate businesses in
developing economy and as such cash flow from operations,
investments and financing activities of a firm should be
adequately monitored by the company managers, investors,
creditors and suppliers and even the government to forestall
financial distress of companies in developing economy.
Description
Staff Publication
Keywords
Delisted company,, Corporate Business,, Healthy companies,, Cash-outflow upper limit.