Cash Management and Financial Performance of Listed Agricultural Firms in Nigeria

Abstract

The financial performance of agricultural has been declining to recent time where most of the agricultural firms reported deficits in their income statement, following the dwindling revenues, firms are in a deep financial crisis that can possibly lead some of them to a halt. Proper cash management is essential for any organizational survival. This is because an institutions’ inability to identify relevant cash management practices can be its source of inability to perform. The general objective of this study was to determine the effect of cash management on financial performance of listed agricultural firms in Nigeria. The study employed an ex-post facto research design. The study population was five (5) listed agricultural firms on the Nigerian Exchange Group (NGX). A sample size of five (5) agricultural firms was used using a census sampling technique covering ten financial years (2012 to 2021). The data used in this study were secondary sourced from annual reports and statement of accounts of the selected firms between 2012 and 2021. The method of data analysis is descriptive statistic, unit root test, diagnostics test and panel ordinary least square (OLS) with the help of E-view v12. The findings showed that there is a significant effect of cash and cash equivalent on return on assets, there is no significant effect of cash turnover on return on assets, there is no significant effect of cash and cash equivalent on return on equity and there is no significant effect of cash turnover on return on equity of listed agricultural firms in Nigeria. It was suggested amongst others that given that cash and cash equivalent were found to enhance return on assets as a measure of financial performance of agricultural firms, this study therefore recommends for continuous embracement of these cash and cash equivalent by agricultural firms in Nigeria.