AKSU Journal of Agricultural Economics, Extension and Rural Development
ISSN(Online): 2736-0040 ISSN(Print): 2695-1975
ISSN(Online): 2736-0040 ISSN(Print): 2695-1975
Abstract
This comparative study evaluated the financial performance of two leading Nigerian agro-allied firms, Presco Plc and Okomu Oil Plc from 2010 to 2024 using published financial statements. We computed liquidity (current, cash, quick) and leverage (debt-to-equity, debt-to-assets, debt-to-capital) ratios and applied independent samples t-tests to compare mean differences. Okomu exhibited stronger liquidity: its mean current ratio (1.883) exceeded Presco’s (1.217), and the difference was statistically significant (two-tailed p = 0.039). Okomu’s mean cash ratio (≈0.791) also significantly exceeded Presco’s (≈0.201) (p = 0.0003). The quick-ratio difference, while higher on average for Okomu (1.273 vs 0.872), was not statistically significant (p = 0.152). On financing, Presco operated with significantly higher leverage: debt-to-equity (1.300 vs 0.742; p = 0.036), debt-to-assets (0.528 vs 0.398; p = 0.005), and debt-to-capital (0.523 vs 0.404; p = 0.014). These results indicated a persistent, statistically verified liquidity advantage for Okomu and a leverage-heavy posture for Presco, including a notable debt spike for Presco in 2016 (D/E ≈ 4.31) that was subsequently moderated. Inference from the panel and the embedded literature suggested that stronger cash and current buffers were associated with operational resilience, while higher structural leverage raised liquidity risk. It was further recommended that Presco should prioritize liquidity buffers, controlled debt, and efficient capital use to mitigate its higher risk, while Okomu should preserve its robust liquidity and conservative financing but seek selective operational improvements.