Leverage and Liquidity Management: Evidence from Nigerian Consumer Goods Firms

This paper examined the effect of leverage on the liquidity of Nigerian firms based on the data of seventeen (17) Nigerian consumer goods firms listed on the Nigerian Stock Exchange for the period of 2012 to 2017. The study adopted multiple regression method. The core finding of the study revealed that leverage has an insignificant positive effect on liquidity management among consumer goods firms in Nigeria. Therefore, the study concluded that companies in the consumer goods industry should operate more above break-even point in order to avoid the danger of fluctuations in sales and profits so as to have substantial amount to meet the day-to-day administrative running of the business

Determinants of Capital Adequacy of Nigerian Banks

A reliable banking system in developing economies like Nigeria is vital for economic progress as it facilitates the flow of funds to productive investment sectors. The capital adequacy requirement of banks is a crucial feature of the stability of the banks globally. Because of its importance, we have examined the antecedents to capital adequacy. We have used the data set of ten leading banks of Nigeria from 2007 to 2017. Our results indicate that ROA and loan to total assets are significantly associated with capital adequacy. However, we found that nonperforming loans and size are negatively associated with the capital adequacy. Our results do not support the association between macroeconomics variables and capital adequacy. Therefore, we recommend that all banking entities should reserve sufficient cash and cash equivalents as a percentage of deposits and apply aggressive risk management practices to reduce the magnitude of nonperforming loans. This study was restricted to one country. Future studies can be carried out in other countries. A comparative data set of more than one country may bring further insight into the phenomenonKeywords: Capital adequacy ratio, banks-specific determinants, macroeconomic determinants, Nigeria