The Impact of Cash Management on Profitability of the Nigerian Oil and Gas Industry (Downstream)

Muhammad Usman¹ , Bishir Balarabe² , Amina Mujitafa Maiwada³ , Abdulrahman Ibrahim Bala⁴

Section:Research Paper, Product Type: Journal-Paper
Vol.7 , Issue.2 , pp.18-24, Dec-2019

Online published on Dec 31, 2019

Copyright © Muhammad Usman, Bishir Balarabe, Amina Mujitafa Maiwada, Abdulrahman Ibrahim Bala . This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
 

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Abstract :
The study aims to assess the impact of Cash Management on Profitability of the Nigerian Oil and Gas Industry (Downstream). The population of the study comprised of the Twelve (12) listed Oil industry on the Nigerian stock exchange as at 31 December 2017, out of which a total of Seven (7) oil industries were sampled for the study. The data generated from the annual reports and accounts of the sampled oil industry were analyzed using SPSS version 25. The results of the analysis were tested at 0.5% level of significance. The findings of the study show that no relationship between cash management (CCC,DCP, CPP and LR) and profitability (ROA and ROE) of oil marketing industries in Nigeria, and also the study found, a positive significant relationship exists between cash management (CCC, DCP, CPP and LR) and ROCE of oil industries in Nigeria. The study recommends the oil companies in Nigeria should find other ways of improving performance (ROA) other than cash management (CCC, DCP, CPP and LR) as revealed by the study. In order to increase performance (ROA) the management of oil companies should reduce cost of their assets and improve their revenues; it also recommends that the management should find other ways of improving performance (ROE) other than cash management (CCC, DCP, CCP and LR) as revealed by the study. In order to improve performance (ROE), the management should increase revenues and reduce their equity and the study recommends that the management of oil companies in Nigeria should put all necessary efforts to increase the efficiency of their cash management (CCC, DCP, CPP and LR) because it has impact on (ROCE).

Key-Words / Index Term :
Profitability, Cash management, Return on Asset, Cash Conversion Cycle

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