EFFECT OF LIQUIDITY RATIOS ON THE FINANCIAL PERFORMANCE OF LISTED HEALTHCARE COMPANIES IN NIGERIA.

ABSTRACT This study examined the effect of liquidity ratios current ratio, quick ratio, and cash ratio on the financial performance of healthcare firms listed on the Nigerian Exchange Group (NGX) between 2018 and 2024. All six listed healthcare firms were included, with Return on Assets (ROA) as the measure of performance and firm size as a control variable. An ex post facto research design was employed, relying on secondary data from audited annual reports obtained from company websites and the NGX portal. The study applied panel regression analysis using the fixed effects model, supported by descriptive statistics and correlation analysis. The findings revealed that the current ratio, quick ratio, and cash ratio each have a positive and statistically significant effect on ROA, underscoring the role of liquidity management in enhancing profitability. Firm size also showed a positive influence on financial performance, suggesting that larger firms benefit from economies of scale and stronger resource utilization. The model explained over 62% of the variation in ROA, confirming the robustness of the results. The study concludes that effective liquidity management is critical for sustaining profitability and long-term growth in the healthcare sector. It recommends that healthcare firms maintain an optimal current ratio for working capital efficiency, strengthen the management of near-cash assets to improve quick ratio, and build adequate but balanced cash reserves to enhance operational stability without sacrificing investment opportunities