CASH FLOW MANAGEMENT AND OPERATING EFFICIENCY OF LISTED OIL AND GAS COMPANIES IN NIGERIA

Abstract

The study is undertaken to examine the effect of cash flow management and operating efficiency of listed oil and gas companies in Nigeria. The dependent variable used is operating efficiency (OPEF) proxy by ratio of operating expenses to operating income and the independent variable is cash flow management proxy by cash flow from operating activities (CFO), cash flow from investing activities (CFI), cash flow from financing activities (CFF) and cash and cash equivalents (CCE) and the control variables are firm size (FIZ) and financial leverage (FIL). Secondary data were obtained from the financial reports of the nine listed oil and gas companies in Nigeria from 2013 -2022. Data obtained were analyzed using descriptive analysis, correlation analysis, variance inflation factor (VIF), and among others. E-view software package (9.0) was used to run the different pre estimation tests, diagnostic test and Panel EGLS (Cross-section random effects). Having controlled for both firm size and financial leverage, the results reveals that cash flow from investing activities (CFI) has a positive insignificant on OPEF, where cash flow from financing activities (CFF) and cash and cash equivalents (CCE) are positively significant to OPEF but cash flow from operating activities (CFO) has is negatively significant to OPEF. Hence, the study concludes that cash flow management has significant effects on operating efficiency of listed oil and gas companies in Nigeria. The study recommended that the operational managers of oil and gas companies should enhance capacity building and training, and also implement stringent cost control measures to reduce operational expenses.