Authors :
Omimakinde John A; Dickson Olayemi F
Volume/Issue :
Volume 7 - 2022, Issue 6 - June
Google Scholar :
https://bit.ly/3IIfn9N
Scribd :
https://bit.ly/3RpUju8
DOI :
https://doi.org/10.5281/zenodo.6820264
Abstract :
This study examined the effect of
environmental dynamism on liquidity position of food
processing firms in Nigeria. The study specifically
analysed the effect of environmental dynamism on
current ratio, quick ratio and cash Ratio of the selected
food processing firms. Secondary data between 2016 and
2020 sourced from annual financial reports of the
selected firms as published on the Nigeria Stock
Exchange database. This study utilised Pearson
correlation analysis and OLS linear regression analysis
to analyse the data collected in order to test all
hypotheses. The findings revealed that environmental
dynamism (ED) positively affects all dependent
variables; There is a positive correlation between ED
and current ratio (r = .837), ED and quick (r =.955) and
ED and and cash ratio (r=.873). The results of the OLS
regression analysis revealed that ED exert an
insignificant positive effect on current ratio with
coefficient of estimate of 13.4384 (P=0.076 >.05). ED
exert a positive significant effect on quick ratio with
coefficient of estimate of 12.6512 (P=0.0114<.05) while
ED exert a positive but statistically insignificant effect on
cash ratio with a coefficient of estimate of 6.8415
(P=0.053 >.05). This study concluded that environmental
dynamism positivelyaffects liquidity position of food
processing firms in Nigeria. Also, significance of the
effect of environmental dynamism reflected differently
in the three liquidity ratios examined. Thus, the selected
food processing firms in Nigeria should complete their
cash-to-cash cycle in the shortest possible time in order
to be positively prepared for uncertainty.
This study examined the effect of
environmental dynamism on liquidity position of food
processing firms in Nigeria. The study specifically
analysed the effect of environmental dynamism on
current ratio, quick ratio and cash Ratio of the selected
food processing firms. Secondary data between 2016 and
2020 sourced from annual financial reports of the
selected firms as published on the Nigeria Stock
Exchange database. This study utilised Pearson
correlation analysis and OLS linear regression analysis
to analyse the data collected in order to test all
hypotheses. The findings revealed that environmental
dynamism (ED) positively affects all dependent
variables; There is a positive correlation between ED
and current ratio (r = .837), ED and quick (r =.955) and
ED and and cash ratio (r=.873). The results of the OLS
regression analysis revealed that ED exert an
insignificant positive effect on current ratio with
coefficient of estimate of 13.4384 (P=0.076 >.05). ED
exert a positive significant effect on quick ratio with
coefficient of estimate of 12.6512 (P=0.0114<.05) while
ED exert a positive but statistically insignificant effect on
cash ratio with a coefficient of estimate of 6.8415
(P=0.053 >.05). This study concluded that environmental
dynamism positivelyaffects liquidity position of food
processing firms in Nigeria. Also, significance of the
effect of environmental dynamism reflected differently
in the three liquidity ratios examined. Thus, the selected
food processing firms in Nigeria should complete their
cash-to-cash cycle in the shortest possible time in order
to be positively prepared for uncertainty.