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
Date Written: November 8, 2016
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: Suggested Citation