The Influence of Operating Cash Flow in Sustaining Firm Performance: Experience from Nigeria quoted foods and beverages firms

This study explore the influence of operating cash on firm performance in Nigeria. It specifically examined the influence of total operating expenses on return on asset, debt on equity, equity market value, total income growth rate, and net income growth rate. The study predicated on free cash flow theory, Trade off theory, and pecking order theory. Secondary data were used to carry out the facts of the situation, which were obtained through the annual financial report of the firm, which covered a period of thirty years spanning from 1990-2020.Data were analyzed using descriptive research design to test the level of cointegration among the variables. The study revealed that the variables used in this study are co-integrated in the long-run which led to the Vector Error Correction Model (VECM) test, which revealed that all variables of operating cash flow incorporated in the model have a positive effect on firm performance both in the short-run and long run. This means that in Nigeria, all independent variables produce the expected positive effect within the periods of study. It was concluded that adequate funds have been injected into the firm from time to time and have been well managed, which enhances the firm's to be more productive. The study also suggests the implementation of compulsory cash flow policies such as investment policy, dividend policy etc. in order to restore the confidence of Nigerian investors and creditors. Government should encourage investment (both public and private) to stimulate productivity, employment, and per capita income.