Cash and Cash Equivalents and Account Receivables on Market Value of Listed Consumer and Industrial Goods Firms in Nigeria

Abstract

The market value of firms is a crucial indicator of how investors perceive its performance and growth and managers and investors are seeking to optimize asset structure for improved firm value. To that end, this study investigates the effect of cash and cash equivalents and account receivables on market value of listed consumer and industrial goods in Nigeria. The independent variables Cash and Cash Equivalents and Account Receivables were measured at their carrying values in the financial statement divided by Total Assets. The dependent variable market value was proxied by Tobin’s Q calculated by adding the market value of equity and the book value of debt, then dividing by total assets while the control variable was proxied by firm size. The study adopts longitudinal panel data research design and relied on secondary data extracted from the audited annual financial reports of sampled firms listed on the Nigerian Exchange Group (NGX) as at Dec 31st, 2024. The study utilised a purposive sampling technique to select 25 consumer and industrial goods firms as its sample population out of a population of 33. The study data was analysed using descriptive statistics and panel regression analysis via STATA 13 statistical software. The study found that both cash and cash equivalents and account receivables exert positive but statistically insignificant effects on market value while firm size which is the control variable showed a negative and insignificant effect on market value. The study concluded that these financial resources enhance liquidity and operational flexibility but does not strongly influence investor perception or long-term valuation in the consumer and industrial goods firms in Nigeria. The study recommended strategic deployment of liquidity that can enhance competitiveness and attract investor confidence and efficient receivables management to strengthen receivables collection systems, and strike a balance between sales growth and liquidity risk.