The Role of Liquidity and Profitability as a Tool for Effective Cash Management in Nigerian Commercial Banks
American Journal of Theoretical and Applied Business
Volume 2, Issue 4, December 2016, Pages: 38-45
Received: Oct. 31, 2016;
Accepted: Nov. 25, 2016;
Published: Dec. 29, 2016
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Marcus Garvey Orji, Department of Business Administration, Veritas University, Abuja, Nigeria
Sunday Alewo Omale, Department of Business Administration, Veritas University, Abuja, Nigeria
Chima Kate, Department of Entrepreneurial Studies, Veritas University, Abuja, Nigeria
Jeresa Solomon, Department of Business Administration, Veritas University, Abuja, Nigeria
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The main aim of managing cash effectively in banks is geared towards enhancing an optimal balance between liquidity and profitability. This is done through the provision of loans and advances in the investment of excess funds to generate income otherwise known as profit. This research study has the objective of assessing liquidity and profitability as a tool for an effective cash management of Nigerian commercial banks with emphasis on first bank of Nigeria plc. The study is a survey research. Primary and secondary data were applied and formulated hypotheses tested using Chi-square derived from Kendal coefficient of concordance. The findings of the study revealed that that there is a relationship between effective cash management and profitability in Nigerian commercial Banks, There is also a relationship between effective cash management and liquidity in First Bank Plc, that First bank’s technique of cash management reduces risks and First Bank’s staff have adequate training in cash management because management of cash is very important to the bank The study recommends that in order to guide against unforeseen circumstances which would have adverse effect on a bank, Care must be taken in the employment of staff in the treasury department. Therefore qualified professionals would be most appropriate in order to carry out good bargaining, better portfolio measurement which makes proper proposal and hence strike acceptable level of cash.
Liquidity, Profitability, Effective Cash Management, Nigerian Commercial Banks
To cite this article
Marcus Garvey Orji,
Sunday Alewo Omale,
The Role of Liquidity and Profitability as a Tool for Effective Cash Management in Nigerian Commercial Banks, American Journal of Theoretical and Applied Business.
Vol. 2, No. 4,
2016, pp. 38-45.
Copyright © 2016 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/
) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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