CAPITAL EMPLOYED AND SUSTAINABLE CASH FLOWS OF LISTED CONSUMER GOODS FIRMS IN NIGERIA

ABSTRACT In the face of increasing competition and economic uncertainty, the ability of listed consumer goods firms in Nigeria to generate sustainable cash flows and optimize their capital employed has become a critical determinant of their long-term survival and success. This study therefore examined the effect of capital employed on sustainable cash flows of listed consumer goods firms in Nigeria. The independent variable being capital employed was proxied by equity financing, debt financing and working capital while the dependent variable being sustainable cash flows was proxied by operating cash flows. The research design adopted for this study was ex-post facto, secondary data was used, the population of the study comprised of 21 listed consumer goods firms in Nigeria and the sample size was 17. The sampling technique used was purposive sampling technique. The dataset for the study was analyzed using panel data regression technique as well as spearman rank correlation analysis to check association between the variables and the statistical tool used was STATA version 14.2. The results obtained revealed that equity financing have no significant effect on operating cashflows of listed consumer goods firms in Nigeria; debt financing demonstrated a significant positive effect on operating cashflows of the said firms and finally, working capital exhibited a significant negative relationship with operating cashflows of listed consumer goods firms in Nigeria. Based on these, it was concluded that capital employed has a significant effect on the sustainable cashflows of listed consumer goods firms in Nigeria. Therefore, it was recommended that firms should consider leveraging debt strategically to support operational activities and short-term liquidity needs; and that especially consumer goods firms should highlights the need for more efficient working capital management by optimizing inventory levels, enforce stricter credit terms for receivables, and negotiate favourable terms with suppliers to extend payment periods, due to the negative effect.