Free Cash Flow Activities and Financial Performance of Listed Pharmaceutical Firms in Nigeria

Chinedu Micheal Onyemenam, Mary Ifeoma Okwo and Charles Uzodinma Eze
Additional contact information
Chinedu Micheal Onyemenam: Federal Government College. Nise, Anambra State.
Mary Ifeoma Okwo: Department of Accountancy, Enugu State University of Science & Technology, Agbani, Nigeria.
Charles Uzodinma Eze: The West African Examinations Council (WAEC), Abakaliki, Nigeria.

International Journal of Research and Scientific Innovation, 2023, vol. 10, issue 9, 109-121

Abstract: This study aimed at evaluating the effect of free cash flow activities on the financial performance of listed Pharmaceutical firms in Nigeria. The specific objectives of this study were to evaluate the effect of operating cash flow, changes in working capital, non-cash expenses and capital expenditure on return on assets of the selected Pharmaceutical firms. The study adopted an ex-post facto design. Data were generated from the audited financial reports of the seven selected listed Pharmaceutical firms in Nigeria from 2010-2021. Panel multiple regression technique was employed to analyze the data using Stata 14.2. The study found that operating cash flow and changes in working capital have significant positive and negative effect on return on assets with t-statistics and (p-values) 4.93(0.000) and -5.47(0.000) respectively investment in non-current assets exerted a non-significant negative effect on return on assets with t-statistics and (p-values) -0.06(0.950) and -0.27(0.785) respectively. These results imply that only operating cash flow contributed positively to financial performance among the free cash flow activities. Therefore the study recommended efficiency in free cash flow management, particularly the management of working capital to cushion the adverse effect of financial performance of the firms.

Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.rsisinternational.org/journals/ijrsi/d ... -issue-9/109-121.pdf (application/pdf)
https://rsisinternational.org/journals/ijrsi/artic ... al-firms-in-nigeria/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bjc:journl:v:10:y:2023:i:9:p:109-121

Access Statistics for this article

International Journal of Research and Scientific Innovation is currently edited by Dr. Renu Malsaria

More articles in International Journal of Research and Scientific Innovation from International Journal of Research and Scientific Innovation (IJRSI)
Bibliographic data for series maintained by Dr. Renu Malsaria ().