1. UKWUEZE NNAEMEKA THADDUES - Department of Accounting, School of Financial Studies, Enugu State Polytechnic, Enugu State &
Department of Accountancy, Faculty of Business Administration, University of Nigeria, Enugu Campus.
2. EMENGINI STEVE EMEKA - Department of Accountancy, Faculty of Business Administration, University of Nigeria, Enugu Campus.
3. NWANGWU CHIBUIKE EMMANUEL - Coal City University, Enugu.
4. NNAMANI CHIDIEBERE - Department of Accountancy, Faculty of Business Administration, University of Nigeria, Enugu Campus.
5. EKWE MICHEAL CHIDIEBERE - Micheal Okpara University of Agriculture, Umudike.
This study empirically investigated the effects of cash management techniques on financial performance and firm value of selected manufacturing firms in Nigeria. The time coverage was 2008 to 2020 using samples of 46 quoted manufacturing firms in Nigeria. Research design adopted was ex-post facto design while analytical technique employed was Structural Equation Modeling (SEM) with a battery of diagnostic and model fit tests: normality test by Kolmogorov-Smirnov and Shapiro-Wilk approaches, unit root test, Pearson’s correlation test, goodness of fit test by Chi-Square, incremental fit test by Tucker Lewis approach, and parsimonious fit tests. Findings uncovered that cash conversion cycle (CCC),Cash and cash equivalent (CASH), cash flow adequacy ratio (CFAR), and financial leverage (FL) through the mediation of Return on Assets (ROA) interact positively with firm value, while through same mediation, the effect of current ratio (CR) on firm value was found to be negative. Also, through the mediation of ROA, the effects of CCC, CASH, CR and FL were significant (p0.05). On the other hand, through the mediation of economic value added, the effects of CASH and CFAR on firm value were positive while those of CCC, CR and FL were negative. In this same mediation of EVA, the effects of all the cash management techniques were insignificant (p>0.05). Based on these findings, the conclusion was drawn that Return on Assets (ROA) is a positive mediator of firm value while Economic Value Added (EVA) is a negative mediator in assessing the effect of cash management techniques for manufacturing firms in Nigeria. In line with the findings, it was recommended among others that firms in the manufacturing sector should minimize the cash conversion cycle length and employ the most effective credit collection policies and terms taken cognizance of the reputation of their firm in relation to suppliers / creditors. Also, adequate liquid and other current assets should be maintained by the firms to cover maturing liabilities / loan obligations.
Financial Performance, Firm value, Economic Value Added, Cash management.