In the second quarter of 2026, a Vanguard‑sourced analysis of 40 companies listed on the Nigerian Exchange Limited (NGX) revealed a combined debt load of N3.9 trillion, with 22 firms holding less cash than the debt they owe. Analysts warned that the liquidity shortfall could pressure earnings, curb investment and, in a worst‑case scenario, trigger job losses across the affected firms.
The study showed a stark split in cash‑to‑debt coverage: 18 companies posted ratios of 1.0 or higher, meaning their cash balances equal or exceed total borrowings, while the remaining 22 firms recorded ratios below 1.0, indicating that debt outstrips cash on hand. The cash‑debt ratio is a simple liquidity gauge that does not alone determine overall financial health or a firm’s ability to service debt.
Companies with the strongest cash buffers included HBM Nigeria, which led the table with a ratio of 319.07 times (cash N393.68 billion vs. debt N1.23 billion). UPDC Real Estate Investment Trust followed at 283.73 times, eTranzact International at 214.89 times, and CWG at 211.10 times. Other firms with substantial coverage were Unilever Nigeria (44.8 times), Berger Paints (18.4 times), Industrial & Medical Gases (13.56 times) and NASCON Allied Industries (12.72 times).
Several major players also maintained modest but positive coverage: Vitafoam Nigeria (5.88 times), International Breweries (3.34 times), Sterling Financial Holdings (3.08 times), May & Baker Nigeria (2.83 times), Livestock Feeds (1.94 times), Julius Berger Nigeria (1.85 times) and Dangote Cement (1.31 times). These ratios suggest a degree of liquidity protection against short‑term debt obligations.
Firms with cash below debt faced the opposite picture. Aradel Holdings recorded a ratio of 0.96 times (cash N1.77 trillion vs. debt N1.84 trillion), while Ellah Lakes (0.81), John Holt (0.77) and Academy Press (0.72) also fell short. The lowest ratios belonged to Caverton Offshore Support Group (0.03), Chellarams (0.05), and Cutix and Japaul Gold & Ventures (each 0.11), highlighting cash positions that represent only a fraction of their total liabilities.
“The cash‑debt ratio provides investors with an important indication of the liquidity pressure facing companies, especially when borrowing costs remain high,” analysts said.
Market observers cautioned that firms with ratios well above 1.0 still need to justify large cash
<small>Source: Vanguard News — read the original story there.</small>
