Abstract:

The oil and gas sector in the Nigeria economy is regarded as one of the most crucial sector that contributes to the revenue of the economy as it contributes about 70percent to the annual federal revenue and as result, it is important to effectively manage the level of liquidity to ensure adequate return on equity and continuous contribution to the Gross Domestic Product. This study therefore examined in the impact of liquidity management on performance of the 8 listed oil and gas firms in the Nigeria stock exchange. This study therefore utilized the random effect regression to examine the impact of cash ratio, quick ratio, current ratio on return on equity as a proxy for performance of the oil and gas firms between 2012 to 2019. It is therefore evident that cash ratio, inflation rate has a positive influence on performance of the oil and gas firms while the current ratio and quick ratio has negative relationship on performance of the firms. It is therefore recommended that that Managers of oil and gas firms should pay particular attention to and take responsibility for guaranteeing consistent liquidity, regardless of the various products provided to customers. Any firm's liquidity management is built around a decent working capital structure.