Julius Berger, Nascon, Unilever Lead NGX Firms With Strongest Short-Term Solvency

Julius Berger Plc, Nascon Allied Industries Plc, Unilever Nigeria Plc, PZ Cussons Plc, May and Baker Plc, Beta Glass Plc, and Aradel Nigeria Plc, are exceptionally stable and financially sound companies for the defensive investors.

The companies benefit from a combination of strong cash generation from operating activities and conservative balance sheet management (low debt), giving them a substantial edge in meeting short-term financial obligations.

The strength in the short-term liquidity of companies like Julius Berger, NASCON, and Unilever Nigeria is typically assessed using financial metrics like the Current Ratio and Quick Ratio (or Acid-Test Ratio).

For instance, Julius Berger has a current ratio of 4.34; Nascon Allied, (2.34); Unilever, (2.17); Beta Glass, (2.04); May and Baker, (2.03), and Aradel, (2.03) in the first nine months of September 2025, which indicates they can survive difficult times without facing insolvency, according to data gathered by MoneyCentral.

The benchmark current ratio of 2.1 advocated by legendary American investor Benjamin Graham was a crucial part of his selection criteria for defensive investors to ensure a substantial margin of safety against short-term financial distress.

The 2:1 current ratio means a company possesses twice as many current assets (assets convertible into cash within one year) as it has current liabilities (debts due within one year).

A favorable ratio indicates strong short-term liquidity, ensuring the company has sufficient resources to meet its immediate debt obligations even if asset values decline unexpectedly or it faces temporary operational challenges.

Also, a 2:1 ratio offers a significant safety cushion against unforeseen circumstances, such as a sharp economic downturn, slow-moving inventory, or difficulties in collecting accounts receivable.

However, most of the firms on the NGXASI index are reeling from deteriorating short-term liquidity which raises concerns about their ability to survive difficult times without facing insolvency.

For instance, only seven out of the forty one companies analyzed have ratio above the 2.10 benchmark, according to data gathered by MoneyCentral.

Dangote Cement recorded current ratio of 0.76; Lafarge Africa, (1.23); BUA Cement, (1.05); Seplat Energy, (0.94); TotalEnergies Marketing, (0.95); Oando, (0.29); MTN Nigeria, (0.51); Airtel Africa, (0.55); Nestle Nigeria, (0.87); Nigeria Breweries, (0.76); International Breweries, (1.57); Dangote Sugar Refinery, (0.48); Transnational Corporation, (1.08); Okomu Oil, (1.25), and Presco Oil, (1.25), according to data gathered by MoneyCentral.

The combined current assets of the forty one firms that stood at N17.70 trillion as at September 2025, is lower than the cumulative total current liabilities of N24.36 trillion, leaving a negative working capital of N6.66 trillion.

Working capital is the difference between a company’s current assets and its current liabilities on its balance sheet. It reflects the liquid resources available to a business to run its day-to-day operations, and it’s an indicator of a company’s short-term financial health.

Analysts say firms can improve on their working capital by magnifying their cash flows, which is essential for paying suppliers, employees and other expenses on time while positioning their businesses to take advantage of growth opportunities.

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