Statement of Cash Flows (IAS 7) and Financial Performance of Listed Deposit Money Banks in Nigeria

Siyanbola Trimisiu Tunji; Adebayo Kajogbade Kameel; Akinbowale Sileola Adebusola; Abiola Tobi

doi:doi:10.11648/j.ijafrm.20220702.13

| Peer-Reviewed

Statement of Cash Flows (IAS 7) and Financial Performance of Listed Deposit Money Banks in Nigeria

Siyanbola Trimisiu Tunji, Adebayo Kajogbade Kameel, Akinbowale Sileola Adebusola, Abiola Tobi

Published in International Journal of Accounting, Finance and Risk Management (Volume 7, Issue 2)

Received: 19 April 2022 Accepted: 6 May 2022 Published: 12 May 2022

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

The effectiveness of cash flows and liquidity contributions to the financial performance of deposit money banks in Nigeria have been of concern that requires special attention. Therefore, this study examined the “significance of Statement of Cash Flows (IAS 7) to the financial performance of listed deposit money banks in Nigeria”. Ex-post facto research design was adopted. The population of the study was 14 while the sample of eleven banks was purposively selected mainly on available data from Nigeria Stock Exchange in 2019. Secondary data collection method was used in extracting data for periods between 2015 and 2019 from their published annual accounts. Both descriptive and inferential statistical methods were adopted using “correlation and regression analysis techniques”. The findings of the study reveal that cash flow activities have no “significant effect on deposit money banks financial performance”. However, when the moderating variable of banks’ size was introduced, the result shows that Cash flows with moderating variable have a “significant effect on financial performance of deposit money banks in Nigeria”. Also, the study established that there is no uniform method adopted by the listed banks in the preparation of the statement of cash flow analysis. The study recommended that the users of the statement should recognize the effect of banks’ size before making any investment decision based on cash flow information. Regulators should persuade banks to adopt a uniform method of preparing Cash Flows Statement for easy comparison and analysis. Finally, contents and accuracy of Statement of Cash Flows should be of interest to both the regulators and external auditors because some stakeholders placed more reliance on the statements in making investment decisions.

Published in	International Journal of Accounting, Finance and Risk Management (Volume 7, Issue 2)
DOI	10.11648/j.ijafrm.20220702.13
Page(s)	49-55
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Cash Flows Statement, Financing Cash Flows, Investing Cash Flows, Net Profit After Tax Margin, Operating Cash Flows

References

[1]	Berle, A., & Means, G. (1932). The modern corporation and private property. New York, Y: Macmillan.
[2]	Davis, J. H., & Donaldson, L. (1991). Stewardship theory or agency theory: CEO governance and shareholder returns. Australian Journal of Management, 16, 49–64. http://dx.doi.org/10.1177/031289629101600103.
[3]	Eisenhardt, M. K. (1989). Agency theory: An assessment and review. Academy of Management Review, 14 (1), 57 – 74.
[4]	Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: managerial behaviour, agency costs and ownership structure. Journal of Financial Economics, 3 (4), 303-360.
[5]	Ahmed, W. S., Iqbal, W., Khan, M. M., & Sheikh, J. (2012). Examination of theoretical andempirical studies on firm’s performance in relation to its board size: A study of small and medium size public firms. Journal of Management Research, 4 (2), 242 – 254.
[6]	Freeman, R. E. (1994). The politics of stakeholder theory: Some future directions. Business Ethics Quarterly, 4, 409 – 422.
[7]	Garba, T., Mikailu, A. S., & Sanda, A. U. (2005). Corporate governance mechanisms and firm’s market performance in Nigeria. The African Economic Research Consortium. Kenya.
[8]	Pandey, I. M. (2008). Financial management. New Delhi: Vikas Publishing House (PVT) Ltd.
[9]	Parveneh, S., Saudah, S., & Siti, Z. B. (2014). A proposed model of the relationship between enterprise risk management and firm performance. International Journal of Information Processing and Management, 5 (2), 70 – 80.
[10]	Amah, K. O., Michael, C. E. & Ihendinihu, J. U. (2016). Relationship of cash flow and financial performance of listed Banks in Nigeria. European Journal of Accounting, Auditing and Finance Research, 4 (4), 89-87.
[11]	Hamza, M. (2014). THE RELATIONSHIP BETWEEN INFORMATIONAL CONTENT OF CASH FLOWS STATEMENT AND STOCK RETURNS FROM ACCOUNTING PERSPECTIVE OF IAS (7) (AN EMPIRICAL STUDY); European Journal of Accounting Auditing and Finance Research, Vol. 2, No. 10, pp. 67-84.
[12]	Nangih, E., Ofor, T. N., & Onuorah, J. K. J (2020). Cash Flow Management and Financial Performance of Quoted Oil and Gas Firms in Nigeria. Journal of Accounting and Financial Management E-ISSN 2504-8856 P-ISSN 2695-2211 Vol 6. No. 4.
[13]	Konak, F. (2018), Effect of cash flow on firm performance: Empirical evidence from Borsa Istanbul Industrial Index. A paper presented at International Multidisciplinary Congress of Eurasia Conference, Rome Italy, September 4-6, 2018. 345-351.
[14]	Muhammad, R. K, Zheng Z. & Sadaf, A. (2017), Free cash flow impact on firm’s profitability: An empirical indication of firms listed in KSE, Pakistan. European Online Journal of Natural and Social Sciences, 6 (1) 146-157.
[15]	Soet, M. A, Muturi W. & Oluoch, O. (2018), Effect of operating cash flow management on financial performance of Mutual Funds in Kenya. European Journal of Business, Economics and Accountancy, 6 (5), 37-46.
[16]	Sharifi, M. & Asadi, A. (2016). Cash Flow and Stock Market Value (Case Study: Tehran Stock Exchange), International Academic Institute for Science and Technology, 3 (2), 33-46.
[17]	Baltagi, B. H. (2015). The Oxford Handbook of Panel Data, vol. 53. Oxford University Press.
[18]	Lumencandela (2019). Bondless Management. Retrieved on 19 March, 2022 from https://courses.lumenlearning.com/boundless-management/chapter/business-stakeholders/

Cite This Article

Plain Text BibTeX RIS

APA Style

Siyanbola Trimisiu Tunji, Adebayo Kajogbade Kameel, Akinbowale Sileola Adebusola, Abiola Tobi. (2022). Statement of Cash Flows (IAS 7) and Financial Performance of Listed Deposit Money Banks in Nigeria. International Journal of Accounting, Finance and Risk Management, 7(2), 49-55. https://doi.org/10.11648/j.ijafrm.20220702.13

Copy | Download

ACS Style

Siyanbola Trimisiu Tunji; Adebayo Kajogbade Kameel; Akinbowale Sileola Adebusola; Abiola Tobi. Statement of Cash Flows (IAS 7) and Financial Performance of Listed Deposit Money Banks in Nigeria. Int. J. Account. Finance Risk Manag. 2022, 7(2), 49-55. doi: 10.11648/j.ijafrm.20220702.13

Copy | Download

AMA Style

Siyanbola Trimisiu Tunji, Adebayo Kajogbade Kameel, Akinbowale Sileola Adebusola, Abiola Tobi. Statement of Cash Flows (IAS 7) and Financial Performance of Listed Deposit Money Banks in Nigeria. Int J Account Finance Risk Manag. 2022;7(2):49-55. doi: 10.11648/j.ijafrm.20220702.13

Copy | Download

@article{10.11648/j.ijafrm.20220702.13,
  author = {Siyanbola Trimisiu Tunji and Adebayo Kajogbade Kameel and Akinbowale Sileola Adebusola and Abiola Tobi},
  title = {Statement of Cash Flows (IAS 7) and Financial Performance of Listed Deposit Money Banks in Nigeria},
  journal = {International Journal of Accounting, Finance and Risk Management},
  volume = {7},
  number = {2},
  pages = {49-55},
  doi = {10.11648/j.ijafrm.20220702.13},
  url = {https://doi.org/10.11648/j.ijafrm.20220702.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijafrm.20220702.13},
  abstract = {The effectiveness of cash flows and liquidity contributions to the financial performance of deposit money banks in Nigeria have been of concern that requires special attention. Therefore, this study examined the “significance of Statement of Cash Flows (IAS 7) to the financial performance of listed deposit money banks in Nigeria”. Ex-post facto research design was adopted. The population of the study was 14 while the sample of eleven banks was purposively selected mainly on available data from Nigeria Stock Exchange in 2019. Secondary data collection method was used in extracting data for periods between 2015 and 2019 from their published annual accounts. Both descriptive and inferential statistical methods were adopted using “correlation and regression analysis techniques”. The findings of the study reveal that cash flow activities have no “significant effect on deposit money banks financial performance”. However, when the moderating variable of banks’ size was introduced, the result shows that Cash flows with moderating variable have a “significant effect on financial performance of deposit money banks in Nigeria”. Also, the study established that there is no uniform method adopted by the listed banks in the preparation of the statement of cash flow analysis. The study recommended that the users of the statement should recognize the effect of banks’ size before making any investment decision based on cash flow information. Regulators should persuade banks to adopt a uniform method of preparing Cash Flows Statement for easy comparison and analysis. Finally, contents and accuracy of Statement of Cash Flows should be of interest to both the regulators and external auditors because some stakeholders placed more reliance on the statements in making investment decisions.},
 year = {2022}
}

Copy | Download

TY  - JOUR
T1  - Statement of Cash Flows (IAS 7) and Financial Performance of Listed Deposit Money Banks in Nigeria
AU  - Siyanbola Trimisiu Tunji
AU  - Adebayo Kajogbade Kameel
AU  - Akinbowale Sileola Adebusola
AU  - Abiola Tobi
Y1  - 2022/05/12
PY  - 2022
N1  - https://doi.org/10.11648/j.ijafrm.20220702.13
DO  - 10.11648/j.ijafrm.20220702.13
T2  - International Journal of Accounting, Finance and Risk Management
JF  - International Journal of Accounting, Finance and Risk Management
JO  - International Journal of Accounting, Finance and Risk Management
SP  - 49
EP  - 55
PB  - Science Publishing Group
SN  - 2578-9376
UR  - https://doi.org/10.11648/j.ijafrm.20220702.13
AB  - The effectiveness of cash flows and liquidity contributions to the financial performance of deposit money banks in Nigeria have been of concern that requires special attention. Therefore, this study examined the “significance of Statement of Cash Flows (IAS 7) to the financial performance of listed deposit money banks in Nigeria”. Ex-post facto research design was adopted. The population of the study was 14 while the sample of eleven banks was purposively selected mainly on available data from Nigeria Stock Exchange in 2019. Secondary data collection method was used in extracting data for periods between 2015 and 2019 from their published annual accounts. Both descriptive and inferential statistical methods were adopted using “correlation and regression analysis techniques”. The findings of the study reveal that cash flow activities have no “significant effect on deposit money banks financial performance”. However, when the moderating variable of banks’ size was introduced, the result shows that Cash flows with moderating variable have a “significant effect on financial performance of deposit money banks in Nigeria”. Also, the study established that there is no uniform method adopted by the listed banks in the preparation of the statement of cash flow analysis. The study recommended that the users of the statement should recognize the effect of banks’ size before making any investment decision based on cash flow information. Regulators should persuade banks to adopt a uniform method of preparing Cash Flows Statement for easy comparison and analysis. Finally, contents and accuracy of Statement of Cash Flows should be of interest to both the regulators and external auditors because some stakeholders placed more reliance on the statements in making investment decisions.
VL  - 7
IS  - 2
ER  -

Copy | Download

Author Information

Siyanbola Trimisiu Tunji

Department of Accounting, Babcock University, Ilisan-Remo, Nigeria
Adebayo Kajogbade Kameel

Department of Accounting, Babcock University, Ilisan-Remo, Nigeria
Akinbowale Sileola Adebusola

Department of Accounting, Babcock University, Ilisan-Remo, Nigeria
Abiola Tobi

Department of Accounting, Babcock University, Ilisan-Remo, Nigeria

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Siyanbola Trimisiu Tunji, Adebayo Kajogbade Kameel, Akinbowale Sileola Adebusola, Abiola Tobi. (2022). Statement of Cash Flows (IAS 7) and Financial Performance of Listed Deposit Money Banks in Nigeria. International Journal of Accounting, Finance and Risk Management, 7(2), 49-55. https://doi.org/10.11648/j.ijafrm.20220702.13

Copy | Download

ACS Style

Siyanbola Trimisiu Tunji; Adebayo Kajogbade Kameel; Akinbowale Sileola Adebusola; Abiola Tobi. Statement of Cash Flows (IAS 7) and Financial Performance of Listed Deposit Money Banks in Nigeria. Int. J. Account. Finance Risk Manag. 2022, 7(2), 49-55. doi: 10.11648/j.ijafrm.20220702.13

Copy | Download

AMA Style

Siyanbola Trimisiu Tunji, Adebayo Kajogbade Kameel, Akinbowale Sileola Adebusola, Abiola Tobi. Statement of Cash Flows (IAS 7) and Financial Performance of Listed Deposit Money Banks in Nigeria. Int J Account Finance Risk Manag. 2022;7(2):49-55. doi: 10.11648/j.ijafrm.20220702.13

Copy | Download

@article{10.11648/j.ijafrm.20220702.13,
  author = {Siyanbola Trimisiu Tunji and Adebayo Kajogbade Kameel and Akinbowale Sileola Adebusola and Abiola Tobi},
  title = {Statement of Cash Flows (IAS 7) and Financial Performance of Listed Deposit Money Banks in Nigeria},
  journal = {International Journal of Accounting, Finance and Risk Management},
  volume = {7},
  number = {2},
  pages = {49-55},
  doi = {10.11648/j.ijafrm.20220702.13},
  url = {https://doi.org/10.11648/j.ijafrm.20220702.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijafrm.20220702.13},
  abstract = {The effectiveness of cash flows and liquidity contributions to the financial performance of deposit money banks in Nigeria have been of concern that requires special attention. Therefore, this study examined the “significance of Statement of Cash Flows (IAS 7) to the financial performance of listed deposit money banks in Nigeria”. Ex-post facto research design was adopted. The population of the study was 14 while the sample of eleven banks was purposively selected mainly on available data from Nigeria Stock Exchange in 2019. Secondary data collection method was used in extracting data for periods between 2015 and 2019 from their published annual accounts. Both descriptive and inferential statistical methods were adopted using “correlation and regression analysis techniques”. The findings of the study reveal that cash flow activities have no “significant effect on deposit money banks financial performance”. However, when the moderating variable of banks’ size was introduced, the result shows that Cash flows with moderating variable have a “significant effect on financial performance of deposit money banks in Nigeria”. Also, the study established that there is no uniform method adopted by the listed banks in the preparation of the statement of cash flow analysis. The study recommended that the users of the statement should recognize the effect of banks’ size before making any investment decision based on cash flow information. Regulators should persuade banks to adopt a uniform method of preparing Cash Flows Statement for easy comparison and analysis. Finally, contents and accuracy of Statement of Cash Flows should be of interest to both the regulators and external auditors because some stakeholders placed more reliance on the statements in making investment decisions.},
 year = {2022}
}

Copy | Download

TY  - JOUR
T1  - Statement of Cash Flows (IAS 7) and Financial Performance of Listed Deposit Money Banks in Nigeria
AU  - Siyanbola Trimisiu Tunji
AU  - Adebayo Kajogbade Kameel
AU  - Akinbowale Sileola Adebusola
AU  - Abiola Tobi
Y1  - 2022/05/12
PY  - 2022
N1  - https://doi.org/10.11648/j.ijafrm.20220702.13
DO  - 10.11648/j.ijafrm.20220702.13
T2  - International Journal of Accounting, Finance and Risk Management
JF  - International Journal of Accounting, Finance and Risk Management
JO  - International Journal of Accounting, Finance and Risk Management
SP  - 49
EP  - 55
PB  - Science Publishing Group
SN  - 2578-9376
UR  - https://doi.org/10.11648/j.ijafrm.20220702.13
AB  - The effectiveness of cash flows and liquidity contributions to the financial performance of deposit money banks in Nigeria have been of concern that requires special attention. Therefore, this study examined the “significance of Statement of Cash Flows (IAS 7) to the financial performance of listed deposit money banks in Nigeria”. Ex-post facto research design was adopted. The population of the study was 14 while the sample of eleven banks was purposively selected mainly on available data from Nigeria Stock Exchange in 2019. Secondary data collection method was used in extracting data for periods between 2015 and 2019 from their published annual accounts. Both descriptive and inferential statistical methods were adopted using “correlation and regression analysis techniques”. The findings of the study reveal that cash flow activities have no “significant effect on deposit money banks financial performance”. However, when the moderating variable of banks’ size was introduced, the result shows that Cash flows with moderating variable have a “significant effect on financial performance of deposit money banks in Nigeria”. Also, the study established that there is no uniform method adopted by the listed banks in the preparation of the statement of cash flow analysis. The study recommended that the users of the statement should recognize the effect of banks’ size before making any investment decision based on cash flow information. Regulators should persuade banks to adopt a uniform method of preparing Cash Flows Statement for easy comparison and analysis. Finally, contents and accuracy of Statement of Cash Flows should be of interest to both the regulators and external auditors because some stakeholders placed more reliance on the statements in making investment decisions.
VL  - 7
IS  - 2
ER  -

Copy | Download