Working Capital and Financial Performance
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Abstract
Abstract
The study examined the effect of operating liquidity on the firm value of listed manufacturing firms in Nigeria. The specific objective was to ascertain the degree to which current ratio; account receivable turnover ratio and cash ratio affect the Tobin’s Q of listed manufacturing firms in Nigeria. The study deployed ex-post facto research design. The population comprised seventeen listed manufacturing firms in Nigeria. Purposive sampling was used to select a sample size of thirteen. Secondary data used in the study were extracted from the annual reports of the firms over a twelve-year period between 2012 to 2023. The study used descriptive analysis to summarize the data while the hypotheses were tested using multiple regression analysis. The study summarily found that: current ratio has a negative and significant effect on Tobin’s Q of listed manufacturing firms in Nigeria (β = -4.3328, p = 0.0000); account receivable turnover ratio has a negative but insignificant effect on Tobin’s Q of listed manufacturing firms in Nigeria (β = -0.0029, p = 0.1473); cash ratio has a positive and significant effect on Tobin’s Q of listed manufacturing firms in Nigeria (β = 2.9499, p = 0.0000). In conclusion, capital market participants differentiate between types of liquidity when assessing firm value, favoring more immediate, cash-based liquidity indicators over broader or less liquid working capital metrics. The study recommends that financial managers of listed manufacturing firms should reduce excessive current assets and reinvest surplus liquidity into revenue-generating activities such as expanding production capacity, launch new product lines, or invest in market expansion to enhance shareholder value.
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@article{Omemgbeoj2026Operating,
title = {Operating Liquidity and Firm Value of Listed Manufacturing Firms in Nigeria},
author = {Ijeoma Scholastica Omemgbeoj},
journal = {JOURNAL OF ACCOUNTING AND FINANCIAL MANAGEMENT},
year = {2026},
doi = {10.56201/jafm.vol.11.no7.2025.pg139.181},
url = {https://doi.org/10.56201/jafm.vol.11.no7.2025.pg139.181}
}FAQ
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