CASH FLOW MANAGEMENT AND FINANCIAL PERFORMANCE OF SELECTED LISTED COMPANIES IN NIGERIA

Abstract

This study was aimed at examining the influence of cash flow management on financial performance of selected listed companies in Nigeria. This was premised on the conflicting results and assertions in the literature in respect to the influence of cash flow management and financial performance of entities. Ex-post facto research design was adopted for the study using secondary data of sixty-three (63) selected listed companies in the Nigerian Stock Exchange (NSE) for the period 2013 to 2019. The nature of data was panel data. The dependent variable for financial performance is Return on Asset (ROA), while independent variables was cash flow management decomposed into Operating Cash Flow Margin (OCFM), Operating Cash Flow Ratio (OCFR), Investing Cash Flow Ratio (ICFR), Financing Cash Flow Ratio (FCFR) and Net Cash Flow Ratio (NCFR). The descriptive and inferential statistics were used for data analyses. Results showed that OCFM, OCFR, ICFR and NCFR had positive and significant influence on Financial Performance (ROA) and FCFR had a negative and insignificant influence on financial performance (ROA) of selected listed companies in Nigeria. It was recommended that managers of entities and policy makers, financial consultants and regulatory agencies avail themselves of the core variables of cash flow management used in this study to understand their nexus and to improve in their statutory functions to enhance long-term sustainability of entities.