Impact of Operating Liquidity on Profitability of Pharmaceutical Firms in Nigeria
Journal Title: International Journal of Academic Research in Accounting, Finance and Management Sciences - Year 2018, Vol 8, Issue 3
Abstract
Operating liquidity involves the most liquid resources of the firm which includes cash and cash equivalents, inventories, trade debtors and other receivables. Most firms do not ensure optimal level of operating liquidity and this has been a major obstacle to their overall profitability. The study examined the impact of operating liquidity on the profitability of Pharmaceutical firms listed on the Nigerian Stock Exchange. Correlation and ex-post facto research design were used in a sample of 5 Pharmaceutical firms. Secondary data for a period of 10 years (2002-2011) was used, and Ordinary Least Squares (OLS) multiple regression was employed in data analysis. The study found that operating liquidity (account receivables collection, accounts payables management) has a significant impact on the profitability of listed pharmaceutical firms in Nigeria. It is therefore recommended among others that managers should, collect receivable as soon as possible because it is better to receive inflows sooner than later, and delay payment of creditors in order to invest the money in short-term securities which are profitable.
Authors and Affiliations
Sylvester Ikechukwu Ejike, Nancy Agha
Keywords
Related Articles
- EP ID EP505254
- DOI 10.6007/IJARAFMS/v8-i3/4466
- Views 77
- Downloads 0
Impact of Capital Flight on Exchange rate in Nigeria
The study examined capital flight and real exchange rate in Nigeria from 1990 to 2014. The study used five independent variables (capital flight, foreign direct investment, current account balance, foreign borrowing and...
Representations of War in the Writings of Ernest Hemingway
This study explores the representations of war in the work of Ernest Hemingway from the interdisciplinary perspective of Cultural Studies, specifically in terms of the complex relationships between history, memory, and r...
Constructive Relationship between Accountancy and the Corporate Governance, Under the Context of Normalization
Assessing Comparative Advantage of Pakistan with United States of America. The Role of Pakistan’s Export Financial Sector
Present study endeavors to assess the comparative advantage of Pakistan’s exports to United Sates of America. Generally comparative advantage is an important concept for explaining pattern of international trade. Aim of...
Influence of Interest Rates Determinants on the Performance of Commercial Banks in Kenya