IMPACT OF LIQUIDITY MANAGEMENT ON FINANCIAL PERFORMANCE OF LISTED CONSUMER GOODS FIRMS IN NIGERIA.

This study investigates the impact of liquidity management on the financial performance of listed consumer goods firms in Nigeria. Adopting a quantitative research design, the analysis utilized secondary data obtained from fifteen consumer goods companies listed on the Nigerian Stock Exchange (NSE) over a ten-year period (2014–2023). Descriptive statistics, correlation analysis, and multiple regression techniques were employed to examine the relationship between liquidity ratios—specifically the current ratio, quick ratio, and cash ratio—and financial performance indicators, including return on assets (ROA), return on equity (ROE), and profit margin. The empirical findings indicate a strong positive association between liquidity management and financial performance, with correlation coefficients ranging from 0.77 to 0.83 across the examined variables. Regression results reveal that the current ratio is a significant predictor of ROA (p < 0.01), whereas the quick ratio and cash ratio exhibit positive but statistically insignificant effects. In addition, firm size and growth rate emerged as significant determinants of financial performance. The regression model accounts for approximately 65% of the variation in ROA, underscoring the critical role of liquidity management in enhancing firm performance. The study affirms the hypothesis that effective liquidity management exerts a positive influence on the financial outcomes of Nigerian consumer goods firms. It extends the body of literature by offering empirical insights from a developing economy and provides practical implications for financial managers, policymakers, and investors. The results underscore the importance of embedding liquidity management within financial strategies, while simultaneously maintaining optimal balance sheet structures to foster profitability and ensure long-term sustainability.