Impact of Covid-19 Pandemic on Liquidity and Profitability of Firms in Nigeria

The study examines the impact of COVID-19 Pandemic on Liquidity and Profitability of Firms in Nigeria. The study is vital as it portrays the extent to which COVID-19 Pandemic has influenced the Liquidity and Profitability of Firms in Nigeria. In order to determine the relationship between COVID-19 Pandemic and Firms Liquidity & Profitability, some key proxy variables were used in the study, namely Liquidity Ratio (LR), Return on Equity (ROE) while COVID-19 Pandemic was proxy by Pre COVID-19 Pandemic Period (2017-2018) and During COVID-19 Pandemic Period (2019-2020). Two hypotheses were formulated to guide the investigation and the statistical test of parameter estimates was conducted using Wilcoxon statistical test tool. The research design used is Ex Post Facto design and data for the study were obtained from the NSE Factbook. The findings of the study show that COVID-19 Pandemic has significantly affected the Liquidity and Profitability of Firms in Nigeria at 5% level of significance. This goes further to confirm that government-imposed partial and total lockdowns during COVID-19 Pandemic increasingly hindered firms access to inputs at the local markets, difficulty in exporting and importing goods which affected both the firms liquidity and profitability negatively. Based on this, the study recommended for government to strengthen its support for local provision of raw materials since COVID-19 outbreak has greatly affected the importation of raw materials necessary for production from China in particular and other countries in general. Thus could make resource input required for production available which could enable firms maintain optimal liquidity and in turn improve firms' profitability.