FINANCING CASH FLOW MANAGEMENT AND FIRM PERFORMANCE: EVIDENCE FROM NIGERIAN LISTED COMPANIES

Abstract

This research investigated how financing cash flow management strategies impact the financial performance of listed Nigerian companies, specifically focusing on the roles of external financing, financial policies, and cash sources on key indicators such as Return on Assets (ROA), Return on Equity (ROE), Expense Ratio (ER), and Total Asset Turnover Ratio (TAR). Using a longitudinal research design, data was collected from the financial statements of 50 listed Nigerian firms (25 manufacturing and 25 service companies) over a ten-year period (2012-2021), selected through stratified random sampling. The analysis revealed significant relationships between financing cash flow management and firm performance: a lower reliance on cash from financing activities (lower cash source component percentage ratio) correlated with higher ROA and ROE, while a higher external financing index ratio (indicating greater reliance on internal funds) positively influenced ROA, ROE, and TAR. These findings underscore the importance of a balanced approach to internal and external funding for effective financing cash flow management and improved corporate performance in Nigeria, offering valuable insights for managers, investors, and policymakers within the Nigerian stock market