An Assessment Of The Critical Need And Acid Test Ratios As A Manufacturing Firm Liquidity Measure. A Study Of Golden Penny Company In South East Nigeria
Ukwueze Nnaemeka Thaddeus
Department of Accountancy, school of Business studies, Enugu State Polytechnic Iwollo (ESPOLY), Nigeria.
Ohagwu Gold Chiamaka
Department of Accountancy, school of Business studies, Enugu State Polytechnic Iwollo (ESPOLY), Nigeria.
Keywords: Critical Need, Acid Test Ratios, Manufacturing Firm, Liquidity Measure
Abstract
This study assesses the critical need and acid test ratios as a manufacturing firm liquidity measure. a study of golden penny company in south east, Nigeria. the specific objective is to; i. investigates the effective use of acid test ratio as a firm liquidity measure and ii. examine if there is significant difference between critical need and acid test ratio as firm liquidity measure. The research design adopted for the study was ex-post facto as the study relied on historic data. The study makes use of secondary source of data. stratified random sampling method was also adopted. The SPSS (Statistical Package for Social Sciences) was used to test the stated and modeled hypotheses, adopting an independent sample t-test. The independent sample t-test was executed aided by the SPSSS at 95% or 90% confidence interval thus giving a 5% or 10% margin of error. The study reveals that, there is no significant difference between critical need and acid test ratios as firm’s liquidity measures and acid test ratio is effectively used as the firm liquidity measure