LIQUIDITY MANAGEMENT AND CORPORATE SURVIVAL OF MANUFACTURING FIRMS IN NIGERIA

Abstract

This study empirically examined the effects of liquidity management on the survival of listed manufacturing firms in Nigeria. Specifically, the study examined the effect of the current ratio, quick ratio, solvency ratio and cash coverage ratios on the survival of listed manufacturing firms in Nigeria. The study used Ex-post facto research design while secondary data was gathered from audited financial statements of the 12 selected manufacturing firms over 2012 – 2017. The data was analyzed using Auto-Regressive Moving Average Generalized Least Square Regression with the aid of the E-views 9.5 statistical package. The study found that quick ratio, solvency ratio and cash coverage ratios, have significant positive effect on the corporate survival of manufacturing firms in Nigeria. The study equally found that the current ratio has a positive and non-significant effect on the corporate survival of manufacturing firms in Nigeria. It was concluded that liquidity management is a prerequisite for corporate survival in the manufacturing sector in Nigeria. Based on the findings, it was recommended that manufacturing firms should put in place accurate liquidity management procedures to avoid facing bankruptcy.