MUSA Adeiza Farouk
Department of Private & Public Sector Accounting
ANAN University Kwali.
Department of Private & Public Sector Accounting
ANAN University Kwali.
DACHOMO, Gloria Pam
Department of Accounting,
Kaduna state university.

Liquidity asset reflects the organization’s ability to repay short-term liabilities, which include
operating expenses and cash flows in other to keep the business running within the organization in the
short run. Thus, higher liquidity assets might alert investors that the company may not be efficiently
investing its resources judiciously. However, this study intends to examine the effect of liquidity asset
on financial performance of listed consumer firms in Nigeria. Proxies used to measure liquidity assets
are cash assets and receivables asset, while the financial performance is proxied by return on asset.
The study concentrated on the period from 2013 to 2022. Panel data was used to analyse the data
sourced from the individual financial reports of the listed consumer firms. The sample adopted sixteen
(16) listed consumer firms out the twenty (20) firms traded in the Nigerian stock market. The study
employed panel regression model to estimate the key relationship between liquidity assets and
financial performance. The result showed that cash asset and receivable asset had a significant effect
on return on asset of listed consumer firms in Nigeria. The study recommends that management
should increase the amount held as cash in order to meet daily obligations, which could yield higher
return before paying its liabilities. Also, consumer firms should create a new strategies and incentives
like discount and promo that will ensure that debtors are encouraged and motivated to settle their
accounts on time.

Keywords: Liquidity Asset, Cash Asset, Receivables Asset, Return on Asset, Listed
Consumer Firms.

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