THE EFFECT OF LIQUIDITY MANAGEMENT ON FINANCIAL PERFORMANCE OF SELECTED LISTED FOOD AND BEVERAGE FIRMS IN NIGERIA

This study was embarked upon to investigate the effect of liquidity management on financial performance of listed foods and beverage firms in Nigeria. The study adopted an ex-post-facto research design and secondary data was gathered to analyze the relationship between the variables. The population of the study consisted on twenty-one (21) food beverages firms listed on the NSE, however, only eight (8) samples were selected from the population. The data was collected from their annual financial report covering a period of ten (10) years (2010-2019). The collected data were analyzed using Ordinary Least Square (OLS) regression analysis. From the results of the findings, it was revealed that the cash conversion cycle has positive and significant effect on financial performance of listed food and beverage firms in Nigeria (p<0.0046); current ratio has positive and significant effect on financial performance of listed food and beverage firms in Nigeria (p<0.0379), however, quick/acid test ratio has no significant effect on financial performance of listed food and beverage firms in Nigeria. (p>0.6580). The study concluded that current ratio is not a significant predictor of food and beverage performance in Nigeria. Acid test ratio as a liquidity measurement ratio maintained a positive and significant relationship with financial performance of listed food and beverage firms in Nigeria and also acid test ratio is a strong liquidity predictor of the financial performance of listed food and beverage firms in Nigeria.