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Impact of liquidity management on the efficiency of manufacturing firms (a case Study of Rokana Industry Nigeria Plc., Owerri)
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This research focuses on impact of liquidity management on the efficiency of manufacturing firms. The study sought to establish the measures of corporate liquidity management and the relationship between liquidity and profitability in manufacturing firms. Data were collected for the study using questionnaire. The opinions of managements were also sought through interviews. The population, N 100 was Rokana Industry Nigeria Plc staff and management at Owerri in Imo State of Nigeria. The Sample size, n 50, was determined by simple random sampling. The data collected were analyzed, tabulated and presented, using simple percentage and conclusions were drawn with the aid of statistical sampling of the responses of the respondents. It was found out that there is a significant impact of liquidity management on the efficiency of manufacturing firms in Nigeria. It was also discovered that an increase in current assets positively affect the efficiency and performance of manufacturing firms in Nigeria. It is recommended that to ensure better liquidity management, that is shorter cash conversion cycle, which would invariably lead to better profitability in manufacturing firms, the duration of time that goods are held in inventory should be reduced. It is also recommended that account receivables should be collected more quickly by improving the efficiency of the collection process as debt should be collected in line with the agreed credit terms. Also, managers should try to delay payables because it will provide them opportunities to invest in different profitable areas thereby increasing the firm’s profitability. Key Words: Liquidity, Current Assets, Profitability, Efficiency.