Management, Vol. 2, Issue 1, Feb  2018, Pages 13-23; DOI: 10.31058/j.mana.2018.21002 10.31058/j.mana.2018.21002

Corporate Strategy on Timing of Cash Flows in Relation to Liquidity Risk and Organisational Performance of Pharmaceutical Industry in Nigeria: Evidence from Panel Data

Management, Vol. 2, Issue 1, Feb  2018, Pages 13-23.

DOI: 10.31058/j.mana.2018.21002

Alayemi, Sunday Adebayo 1*

1 School of Business and Management Studies, Department of Accountancy, the Federal Polytechnic, Offa, Nigeria

Received: 6 December 2017; Accepted: 2 January 2018; Published: 12 February 2018

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Abstract

The study empirically examined corporate strategy on timing of cash flows in relation to liquidity risk as it affects organizational performance. Presently, the economic situation is very tight which is why it is very difficult if not impossible to procure working capital in money market. Where it is available the associated cost usually which makes the organization to be worse off. The option left to management is to strategies on timing of cash flows as it affects the liquidity risk and performance. The study aimed at realizing four objectives. To achieve the stated objectives, four corresponding research hypotheses were formulated. The population of the study was made of all the pharmaceutical companies in the pharmaceutical industry. Purposive sampling method was employed based on the gross operating profit as a measure of performance of the entities that made up the population. Secondary method of data collection was used because the data collected from the financial statement of the sampled entities had been subjected to certain degree of scrutiny to ensure validity, accuracy and completeness of the information. The study revealed that there is positive correlation between the independent variable (GOP) and explanatory variables (DIH, DSO, DPO and CCC) though very low, except that of the relationship between GOP and DIH. R2 Within, Between and overall revealed 54%, 0% and 27% respectively as a measure of the proportion of the variation in the dependent variables. The result of R2 showed that there is no collinearity in the model. The overall significance of the model was assessed by the value of F-statistics of 123165.62 and p-value of 0.00 which is less than 0.05. The implication is that there is no autocorrelation between dependent variable and the independent variable. The outcome of the regression analysis revealed that all the predictor variables made contributions to the variation no matter how small in the dependent variable.

Keywords

Autocorrelation, Collinearity, Strategy, Predictor, Purposive Sampling, Strategic, Management

Copyright

© 2017 by the authors. Licensee International Technology and Science Press Limited. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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