Cash Flows and Financial Performance of Quoted Hospitality Firms in Nigeria

Abstract

Managers of organizations that treat Cash flows as priority among other financial management issues are bound to achieve financial success. For the fact that cash is king in business, this investigation focused on  Cash flows in relation to financial performance of quoted Hospitality / Tourism firm in Nigeria. Data were sourced from audited financial reports of ten (10) quoted Hospitality firms (2008-2017) and fact books of Nigerian Stock Exchange for the periods reviewed. Ordinary least square method was used to determine the extent to which cash flow management relates with  financial  performance of the selected hospitality and hospitality firms. After cross examination of the validity of the pooled effect, fixed effect and the random effect the study findings indicated that  that there is no significant relationship between Cash flow from Operating Activities and Returns on Assets of hospitality firms in Nigeria. That there is significant relationship between Cash flow from Operating Activities and Net Profit Margin of hospitality firms in Nigeria. That there is significant relationship between Cash flow from Operating Activities and earnings per share of hospitality firms in Nigeria. Therefore, the study concludes that Cash flows has a moderate relationship with the financial  performance  of the quoted hospitality and tourism firms in Nigeria . Deriving from the conclusion, the study recommend that hospitality and tourism firms in Nigeria  should  set-up a result oriented cash flow system that will encourage the investing public to avail themselves of financial risk capable of not jeopardizing their investment and  in order to restore the confidence of Nigeria investors and creditors the implementation of compulsory cash flow policies such as investment policy, dividend policy should be encouraged in the hospitality and tourism firms.

Keywords: Cash Flow, Financial Performance, Hospitality Firms, Net profit

DOI: 10.7176/RJFA/12-2-03

Publication date: January 31^st 2021