Abstract
The study investigated cash management and profitability of conglomerate firms in Nigeria. Specifically, the study examined the effect of Cash Conversion Cycle (CCC), Cash Ratio (CSR) and Cash Flow Ratio (CFR) on Return on Assets (ROA) of conglomerate firms in Nigeria. Cash is a component of working capital and an important source of liquidity for a business organizations, including the conglomerate firms. The study was motivated by the paucity of work in this area concerning conglomerate firms operating in Nigeria. A sample of five (5) conglomerate firms listed on Nigeria Exchange Group during the period of 2013 to 2023 was selected for the study. Panel Least Square Regression Model was used to analyses secondary data obtained from the annual financial statement of the selected conglomerate firms. Research results indicate that Cash Conversion Cycle (CCC) and Cash Flow Ratio negatively affected Return on Assets (ROA) of the conglomerate firms in Nigeria in an insignificant manner, while Cash Ratio positively affected Return on Assets (ROA) of the firms in an insignificant manner. The study concludes that conglomerate firms in Nigeria are not prudently managing their cash flow as cash conversion cycle and cash flow ratio negatively affect return on assets of the firms. In view of this, the study recommends that conglomerate firms in Nigeria should increase their profitability by increasing their inventory level and account receivable turnover ratios while reducing account payable turnover ratio. The firms could also maximize profit by reducing their cash and cash equivalent to avoid idle funds. The study further recommends that conglomerate firms should increase profitability by keeping their net cash flow at an optimal level.
Keywords: Conglomerate Firms, Cash Conversion Cycle, Cash Flow Ratio, Cash Ratio. Return on Assets.