Free Cash Flow Effect

Free-cash flow effect on firm's performance

European Journal of Accounting Auditing and Finance Research Vol.2,No.7, pp.77-87 ,September 2014 Published by European Centre for Research Training and Development UK (www.eajournals.org) CASHFLOW AND CORPORATE PERFORMANCE:A STUDY OF SELECTED FOOD AND BEVERAGES COMPANIES IN NIGERIA Bingilar Paymaster Frank Department of Finance and Accountancy Faculty of Management Sciences Niger Delta University P.M.B. 071 Yenagoa. Oyadonghan Kereotu James Department of Finance and Accountancy Faculty of Management Sciences Niger Delta University, Wilberforce Island, P.M.B. 071, Yenagoa, Bayelsa State, Nigeria

ABSTRACT: The study examines the relationship between cash flow and corporate performance in the Food and Beverages sector of Nigeria. The study involved a survey of Six (6) Food and Beverages companies quoted in the Nigerian Stock Exchange. Data were obtained from the annual report and accounts of the selected companies under study. The relevant data were subjected to statistical analysis using the multiple regression technique. The results of the study revealed that operating and financing cash flows have significant positive relationship with corporate performance in the Food and Beverage Sector of Nigeria. It was also empirically verified that investing cash flow and corporate performance have significant negative relationship. The researchers recommended that regulatory authorities such as IFRSB, FRCN, CBN, NSE, SEC, NDIC, etc. should encourage external auditors of these quoted Food and Beverages Companies to use cash flow ratios in evaluating the performance of a company before forming an independent opinion on the financial statement. This will give detailed information on the company to enable investors make rational investment decisions.

EFFECT OF FREE CASH FLOW ON PROFITABILITY OF FIRMS LISTED ON THE NAIROBI SECURITIES EXCHANGE BY OJODE CHRISTINE AKUMU A RESEARCH PROJECT SUBMITTED IN...