Original Research Article | OPEN ACCESS
Cash Management and Financial Performance of Listed Manufacturing Firms in Nigeria

Raphael Dibie,

1Department of Accounting, Delta State University of Science and Technology, Ozoro, Delta State.

For correspondence:-     Email: dibieralph@yahoo.com

Received: June 23 2022        Accepted: September 24 2022        Published: September 30 2022

Citation: Dibie, R. Cash Management and Financial Performance of Listed Manufacturing Firms in Nigeria. Account Tax Rev 2022; 6(3):12-23 doi:

© 2022 The authors.
This is an Open Access article that uses a funding model which does not charge readers or their institutions for access and distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0) and the Budapest Open Access Initiative (http://www.budapestopenaccessinitiative.org/read), which permit unrestricted use, distribution, and reproduction in any medium, provided the original work is properly credited..



This study examined the impact of cash management on financial performance of quoted manufacturing firms in Nigeria. The cash management variables examined in the study include cash conversion cycle (CCC), Creditors payment period (CPP), and Cash flow margin (CFM). The Arellano and Bond dynamic panel data estimation was employed in the analysis to address the potential effects of endogeneity in the relationship. The findings reveal that Cash conversion cycle has a positive and significant impact on financial performance, Creditors' payment Period (CPP) has a positive impact on the firm financial performance, which is significant at 5%. Furthermore, cash flow margin (CFM) positively impacts financial performance, which is also significant at 5%. The following policy recommendations are provided in light of the study's findings. Firstly, firms should not depend so much on debt, especially in the light of macroeconomic instability and rate volatility but instead should look at how to develop strategies to lower their cash conversion cycles. Secondly, firms should seek long-term financing arrangements with longer payback periods, enabling them to properly utilise these funds with convenient investment timelines. Thirdly, firms should maintain a high cash flow margin by designing effective sales and marketing systems on the one hand and on the other hand to put in place a mechanism to minimise credit sales where possible and ensure timely payment arrangements where credit sales are involved.

Keywords: Cash Management, Cash conversion cycle, Creditors payment period, Cash flow margin, Working capital management

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