In Financial Systems, the impact of Free Cash Flow (FCF) on the performance of a company has been in the center of academic discourse in recent years. Several studies have tried to ascertain the nature and magnitude of the relationship between free cash flow and firm profitability with conflicting results coming from different scholars. The main objective of this research work was to examine the impact of FCF on the profitability of quoted manufacturing firms in the Nigerian and Ghana stock exchanges. Data were pooled from twenty (20) different companies (ten each from Nigeria and Ghana) for a period of six years (2012 – 2017). A panel data estimation model was used to measure the impact of FCF and other performance metrics on the Return on Assets (ROA), which is our chosen profitability measure. The results show a positive but insignificant relationship between FCF and ROA both for Ghana and Nigerian manufacturing firms. Also, sales growth showed a positive impact on profitability of both countries while leverage negatively impacted on profitability. with Ghana being significant at 5%. The implication of the findings of the study is that it makes no business sense for companies to keep piling up excess funds beyond that which is needed for transactional purposes. The similarity between the results from Ghana and Nigeria in most of the variables shows that the findings of this study can be generalized to other countries. Based on the findings of the study, we recommend that the management of companies should strive to keep only the minimum needed free cash flow while the rest should be invested in other projects with positive net present value
The global decline in oil price has had a significant effect on the Nigerian economy especially the banking sector and this has led to some banks; revenue shortfalls, increase in their non-performing loans, layoff of staff, decrease in the bank deposit base, deterioration of the bank's asset quality, and reduction in the volume of transactions etc. Therefore, the main objective of this research is to examine the effects of the global decline in oil price on the Nigerian banking sector. Descriptive statistics and Simple linear regression was used as a tool for data analysis which was run with a pool ordinary least square and the findings revealed that there exists a positive and significant relationship between oil prices and the financial performance (three key performance indices were used to measure performance such as; profit after tax, current ratio, and net interest margin) of the banks especially in the period characterized by the decline in oil price. This paper, therefore, recommends that the government should take proactive steps to revamp the Agricultural sector by empowering our local farmers while commercial farming should be encouraged. Banks should endeavor to imbibe diversification of their investments and engage in financial innovation in order to improve their performance so as to enable them to be competitive globally.
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