CASH FLOW MANAGEMENT AND FINANCIAL PERFORMANCE OF LISTED FINANCIAL SERVICE FIRMS IN NIGERIA

Abstract

Cash in organizations always take two directions, inflow and outflow, these dimension result in cash flow.The financial manager of the firm takes it a priority to ensure cash outflow does not outweigh the cash inflow, which is another term refer to as cash management.This study examined the effect of cash flow management and financial performance of listed financial service firms in Nigeria, a target population of 46 quoted financial service firms in Nigeria as at 31st December 2022, in which 7 quoted financial service firms were selected using Yamane taro formular and simple random sampling techniques based on their complete annual account report in the financial statement over the period of the study. The study cover a period of 10 years from 2012 to 2022. The Stata Version 14.2 was uses and the estimation techniques are OLS ordinary least square and diagnostic test, the data obtain were analysed using descriptive statistics, multiple regression and correlation co- e cient. The study uses return on asset, return on equity, earning per share as dependent variables and operating cash Œow, investing cash Œow and ÿnancing cash Œow as independent variables. It is foundthatoperating cash flow has a significantly positive effect on thefinancial performance of listed financial service firmswhilecash flow has a significantnegative impact on earnings per share but a positive impact on return on asset and return on equity. The study recommend that the sampled ÿnancial service ÿrms in Nigeria should follow the steps of pecking order theory in management of their cash flow, thus reducing or minimizing the issuing of share and concentrate on financing their firms with their retained earningsandcash flow from financing activities should be maintained asit is proven to have a significant negative effect on the performance of listed financial service firms in Nigeria.