IMPACT OF CASH MANAGEMENT ON FIRM PROFITABILITY OF LISTED CONSUMER GOODS IN NIGERIA
Abstract
This study investigates how cash management affects the profitability of Nigerian publicly traded consumer goods companies. The study made use of documentary data gathered from the annual reports of 20 consumer goods firms those listed on the Nigerian Exchange Group (NGX) floor for the period spanning 2012 to 2021. Descriptive statistics, correlation analysis, and regression methods were used to analysis the data. The findings demonstrate that the profitability of listed consumer products companies in Nigeria is adversely impacted by cash flow from operating activities. However, the impact was greater for ROA than ROE. This suggests that operating costs and the profitability of consumer goods service companies in Nigeria have a strong link and are potentially correlated. Similar to this, the profitability of listed consumer products companies in Nigeria is adversely impacted by cash flow from investing activities. For ROA, the effect was modest; however, for ROE, it was considerable. The outcome also showed that the profitability of listed consumer goods service firms in Nigeria is significantly positively impacted by cash flow from financing activities. According to the survey, managers of consumer products service companies in Nigeria should keep an eye on their operational costs and make sure they are maintained to a minimum. To avoid unsafe investments, they should be more effective and cautious when making investing decisions.
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