Cashflow Statement and Liquidity: Empirical Evidence from Quoted Banks in Nigeria (2010-2015)

Proceedings of Faculty of Management Sciences' 2016 International Conference, Nnamdi Azikiwe University, Awka

16 Pages Posted: 28 Jul 2017 Last revised: 10 Sep 2017

See all articles by Nestor Amahalu

Nestor Amahalu

Nnamdi Azikiwe University - Department of Accountancy

Pius Vincent Okoye

Nnamdi Azikiwe University - Department of Accountancy

Obi Chinyere

University of Nigeria Enugu Campus

Chike Nweze

Nnamdi Azikiwe University - Department of Accountancy

Date Written: November 8, 2016

Abstract

The objective of this study is to determine the relationship between cash flow statement and liquidity with a focus on quoted banks in Nigeria. This study made use of secondary data obtained from fact books, annual report and account of the selected banks under study. The relevant data were subjected to statistical analysis using pearson coefficient of correlation, normality test, ordinary least square regression, heteroskedasticity and Hausman tests. The result of this study revealed that, there is a positive and significant relationship between cash flow statement and liquidity. It was also empirically verified that cash flow statement has a statistically significant effect on liquidity of banks quoted on the floor of Nigeria stock exchange at 5% level of significance. The researcher recommends that external auditors should be encouraged to use cash flows ratios in evaluating the performance of a company before forming an independent opinion on the financial statement, as this will give detailed information on the financial performance of the company to enable investors make effective investment decisions.

Keywords: Operating cashflow, investing cashflow, financing cashflow and liquidity

JEL Classification: L29, L48, L56

Suggested Citation

Amahalu, Nestor and Okoye, Pius Vincent and Obi, Juliet and Nweze, Chike, Cashflow Statement and Liquidity: Empirical Evidence from Quoted Banks in Nigeria (2010-2015) (November 8, 2016). Proceedings of Faculty of Management Sciences' 2016 International Conference, Nnamdi Azikiwe University, Awka. Available at SSRN: https://ssrn.com/abstract=3008625

Nestor Amahalu (Contact Author)

Nnamdi Azikiwe University - Department of Accountancy ( email )

Awka, Anambra 23400
Nigeria
+2348063393668 (Phone)

Pius Vincent Okoye

Nnamdi Azikiwe University - Department of Accountancy ( email )

Awka, Anambra 23400
Nigeria

Juliet Obi

University of Nigeria Enugu Campus ( email )

Department of Accountancy
Box 15540, Enugu
Enugu, NC Enugu 234
Nigeria

Chike Nweze

Nnamdi Azikiwe University - Department of Accountancy ( email )

Awka, Anambra 23400
Nigeria

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