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ABSTRACT
Availability of cash for daily business transaction is important for firm success. The broad objective of this study is to investigate the relationship between liquidity management and profitability of firms in Nigeria.
The study made use of secondary data sourced from annual reports of listed firm for a period of five years. The variables for this study are current ratio, quick ratio, and cash ratio as the independent variables while the dependent variable is return on asset with a time frame of 2018 to 2022 making it five-year period.
The results from the regression analysis revealed that Current ratio has a positive and significant relationship with profitability of listed manufacturing firms in Nigeria. Quick ratio has a positive and significant relationship with profitability of listed manufacturing firms in Nigeria. There is a positive and significant relationship between cash ratio and profitability of listed manufacturing firms in Nigeria. The study recommends the implementation of strong internal control systems that might enhance the liquidity fundamentals of the firms in order to assure the firm's continued existence and development.
