Cash Flow from Operating Activities and Financial Performance of Investment Firms Listed at Nairobi Securities Exchange in Kenya.

Financial Performance of Investment Firms Has a Significant Impact on Future Prospects of the Firm. Listed Companies Place a Lot of Emphasis on Profitability and Stability of Their Performance. However, Investment Firms Have Been Experiencing a Problem of Poor Financial Performance Over Time. The Study Seeked to Establish Effect of Cash Flow From Operation Activities on Financial Performance of Investment Firms Listed at Nairobi Securities Exchange in Kenya. The Study Was Anchored on Resource-Based View Theory. Descriptive Research Design Was Used in This Study. All the Investment Firms Listed at NSE Were Subject of Investigation Hence a Census Study Was Conducted. Secondary Data Was Sourced From Cash Flow Statements and Other Relevant Financial Statements Using Secondary Data Collection Sheet. The Data Was Analyzed Using Descriptive and Inferential Statistical Methods With the Aid of SPSS, (Version 29.0) Statistical Software. Descriptive Statistical Tools Including Mean, Frequency, Standard Deviation, Skewness and Kurtosis Were Used. Inferential Statistics Included Use of Product Moment Correlation to Depict Strength and Direction of Relationship Between Variables. Panel Regression Model Was Applied for Data Analysis and Langrage Multiplier Test Was Done to Determine Whether Fixed Effect Model Was Suitable for Analysis. The Finding of the Study Indicated a Positive and Significant Correlation Between Operating Cash Flows and Financial Performance of Investment Firms Listed at NSE in Kenya. Coefficient of Determination (R-Squared (R2) Value Was 0.6451 for CFOA. The P-Value for the Variable Was Less Than 0.05 Level of Significance. This Implied That Operating Cash Flow Explained Financial Performance of Listed Investment Firms in Kenya. The Finding of This Study Will Be of Benefit to a Number of Interested Parties Including Creditors, Investors, the Government, Scholars and Researchers, Regulatory Authorities and Trading Companies. From the Findings of the It Was Recommended That Directors of Investment Firms Should Implement a Policy Focusing on Quick Moving Inventory, Which Will Eventually Affect Other Components of Operations.

Cash flow, Cash flow from financing activities, Cash flow from investment activities, Cash flows from operations, Free cash flow, Financial performance, Return on Equity.

1. Adrian, T. & Rosenberg, J. (2008). Stock Returns and Volatility: Pricing the Short-Run and Long- Run Components of Market Risk. Federal Reserve Bank of New York Staff Reports no. 254 [Google Scholar] [Crossref]

2. Adelegan, O. J. (2017). Investment, Financial Factors and Cash Flow from Nigerian Panel Data. Journal of African Development, 11(1), 77-108. [Google Scholar] [Crossref]

3. Aduda, J., Masila, J. M. & Onsongo, E. N. (2012). The Determinants of Stock MarketDevelopment: The Case for the Nairobi Stock Exchange. International Journal of Humanities and Social Science, 2(9), 214-230 [Google Scholar] [Crossref]

4. Akoto, R. K, Awunyo, V and Angmor, P. L. (2013). Working Capital Management and Profitability: Evidence from Ghanania Listed Manufacturing Firms. Journal of Economics and International Finance, 5(9), 373-379. [Google Scholar] [Crossref]

5. Ali, M., Alireza, A. and Jalal, A. (2013). The Association between Various Earnings and Cash Flow Measures of Firm Performance and Stock Returns: Some Iranian Evidence. International Journal of Accounting and Financial Reporting, 3(1), 24-39. [Google Scholar] [Crossref]

6. Alloy J and Velnampy (2014). Firm Size and Profitability: A Study of Listed Manufacturing Firms in Sri Lanka. International Journal of Business and Management; 9(4): 201- 244. [Google Scholar] [Crossref]

7. AsifIqbal & Wang Zhuquan (2015).Working Capital Management and Profitability: Evidence from Firms Listed on Karachi Stock Exchange. International Journal of Business and Management; 2(10) 201-215 [Google Scholar] [Crossref]

8. Aurangzeb, D. (2012). Factors Affecting Performance of Stock Market: Evidence from South Asian Countries. International Journal of Academic Research in Business and Social Sciences, 2(9), 1-15 [Google Scholar] [Crossref]

9. Bikker, J. A., Broeders, D. & Dreuc, J. (2010). Stock Market Performance and Pension Fund Investment Policy: Rebalancing, Free Float, or Market Timing? International Journal of Central Banking, 10(2), 53 – 79 [Google Scholar] [Crossref]

10. Bodie, Z., Alex, K. and Alan, J.M. (2014), Essentials of Investments, (5th ed). New York: McGrawHill Irwin [Google Scholar] [Crossref]

11. Boyd, H., Levine, R. & Smith, B. (2001). The Impact of Inflation on Financial Sector Performance. Journal of Monetary Economics 4 (7), 21-48. [Google Scholar] [Crossref]

12. Burns, R. B. & Burns, R. A. (2008). Business Research Methods and Statistics using SPSS. London: Sage Publications Limited. [Google Scholar] [Crossref]

13. Cable, R., Healy, P., & Li, C. (2017). Assessing the Impact on Cash Flows from Operating Activities –FASB’s Proposed Accounting Standards Update. The Journal of Global Business Management, 12(1), 1-7. [Google Scholar] [Crossref]

14. Chikashi, T. O. (2013). An Investigation of Comprehensive Income and Firm Performance: The case of the Electric Appliances Industry of the Tokyo Stock Exchange. Journal of Accounting and Finance Research, 2(12), 29-35. [Google Scholar] [Crossref]

15. Dang, N., Tran, M., & Nguyen, T. (2018). Investigation of the Impact of Financial Information on Stock Prices: The Case of Vietnam. Academy of Accounting and Financial Studies Journal, 22(2), 13-21 [Google Scholar] [Crossref]

16. Darek, K., (2012) Liquidity Gaps in Financing the SME Sector in an Emerging Market: Evidence from Poland. International Journal of Emerging Markets 7(3): 335-355 [Google Scholar] [Crossref]

17. Debre Markos University, Debre Markos, Ethiopia. Research Journal of Education and Business Studies 2(26) 2001-2013 [Google Scholar] [Crossref]

18. DwiMartani, Mulyono, RahfianiKhairurizka (2009). Effect of Financial Ratios, Firm Size, and Cash Flow from Operating Activities in the Interim Report to the Stock Return. Chinese Business Review, 8(17):44-53. [Google Scholar] [Crossref]

19. Fama, E. (1970). Efficient Capital Markets: A Review of Theory and Empirical Work. The Journal of Finance, 25(2), 383-417. [Google Scholar] [Crossref]

20. Fama, E. (1981). Stock Returns, Real Activity, Inflation, and Money. American Economic Review, 71(4), 545-565. [Google Scholar] [Crossref]

21. Habib, A. (2011). Growth Opportunities, Earnings Permanence and the Valuation of Free Cash Flow. Australian Accounting Business and Finance Journal, 5(4), 101-122. [Google Scholar] [Crossref]

22. Hassan, W. & Awais, M. (2015). Behavior of Macroeconomic Forces to Predict Stock Returns: Empirical Evidence from Global Financial Markets. European Academic Research, 3(3), 674 – 698 [Google Scholar] [Crossref]

23. Hina, A. Mba & Mphil. (2014). Impact of Capital Management on Profitability. European Scientific Journal, 10(1):185-197. [Google Scholar] [Crossref]

24. Howells, P. & Bain, K (2008). Economics of Money Banking and Finance (4th Ed). New York: Prentice Hall. [Google Scholar] [Crossref]

25. Ilaboya, O. J. & Aggreh, M. (2013). Dividend Policy and Share Price Volatility. Journal of Asian Development. Studies 2(2), 109-122 [Google Scholar] [Crossref]

26. Ikechukwu, O., Nwakaego, D., & Celestine, A. (2015). The Effect of Cash Flow Statement on Companies Profitability (A Study of Some Selected Banks in Nigeria). African Journal of Basic & Applied Sciences, 7(6), 350-356. [Google Scholar] [Crossref]

27. Irandoost, R., Hassanzadeh, R. B. & Salteh, H. M. (2013). The Effect of Dividend Policy on Stock Price Volatility and Investment Decisions. European Journal of Natural and Social Sciences, 2(3), 51-59 [Google Scholar] [Crossref]

28. Itotenaan, H. O., Amadi, S.N., Moshfique, M. U. & Dubon, P. (2013). Oil Price & Stock Market Performance in Nigeria: An Empirical Analysis. American Journal of Social and Management Sciences, 4(1), 20-41 [Google Scholar] [Crossref]

29. Kanani, A., Mirniya, S., Farajzadeh, A., & Aboutalebzadeh, S. (2014). The Relation between Changes of Cash Flow Statement’s Components and Market Value of Accepted Companies in Tehran Stock Exchange. Indian Journal of Fundamental and Applied Life Sciences, 4(1), 1807-1812. [Google Scholar] [Crossref]

30. Khaled, M. (2012). Financial Crisis, Share in the Jordanian Commercial Banks for the Period 2000–2009. Interdisciplinary Journal of Contemporary Research in Business, 4(8), 191-201. [Google Scholar] [Crossref]

31. Khanji, I., & Siam, A. (2015). The Effect of Cash Flow on Share Price of the Jordanian Commercial Banks Listed in Amman Stock Exchange. International Journal of Economics and Finance, 7(5), 105-109. [Google Scholar] [Crossref]

32. Kothari, C.R. (2004). Research Methodology Methods and techniques (2nd Ed.). New Delhi: New Age International (P) Limited [Google Scholar] [Crossref]

33. Kirui, E., Wawire, N. H. W. & Onono, P. O. (2014). Macroeconomic Variables, Volatility and Stock Market Returns: A Case of Nairobi Securities Exchange, Kenya. International Journal of Economics and Finance, 6(8), 214-228 [Google Scholar] [Crossref]

34. Kirwa, L. N. & Mutuku, C. (2015). Macroeconomic Variables and the Kenyan Equity Market: A Time Series Analysis. Business and Economic Research, 5(1), 1-10 [Google Scholar] [Crossref]

35. Kiymaza, H. & Berument, H. (2003). The Day of the Week Effect on Stock Market Volatility and Volume: International Evidence. Review of Financial Economics, 12(4)363–380. [Google Scholar] [Crossref]

36. Maku, O. E. & Atanda, A. A. (2010): Determinants of Stock Market Performance in Nigeria: Long Run Analysis. Journal of Management and Organizational Behaviour, 1(3), 1-16 [Google Scholar] [Crossref]

37. Malkiel, B. (2005). Reflections on the Efficient Market Hypothesis: 30 Years Later. The Financial Review, 7(40), 1-4 [Google Scholar] [Crossref]

38. Manyo (2013).The Effect of Accounts Receivable on Return on Assets of Selected Nigerian Firms. International Journal of Current Research 5(12): 3767-3772. [Google Scholar] [Crossref]

39. Mele, A. (2008). Understanding Stock Market Volatility: A Business Cycle Perspective Working Paper, London School of Economics. [Google Scholar] [Crossref]

40. Musah, M., & Kong, Y. (2019). The Affiliation between Cash Flows and the Financial Performance of Non-Financial Firms: An Empirical Evidence from the Ghana Stock Exchange (GSE). EPRA International Journal of Research and Development (IJRD), 4(4), 19-28 [Google Scholar] [Crossref]

41. Nangih, E., Ofor, T., & Ven, O. (2020). Cash Flow Management and Financial Performance of Quoted Oil and Gas Firms in Nigeria. Journal of Accounting and Financial Management, 6(4), 1-11. [Google Scholar] [Crossref]

42. Nwanyanwu, L.A. (2015).Cash Flow and Organizational Performance in Nigeria: Hospitality and Print Media Industries Perspective. European Journal of Business, Economics and Accountancy, 3(1): 66-78. [Google Scholar] [Crossref]

43. Omuchesi, J. A. & Bosire, M. (2014). The Effect of Automation on Stock Market Price Volatility: A Case of Nairobi Securities Exchange. Journal of Economics and Finance, 5(3), 71-79 [Google Scholar] [Crossref]

44. Osazevbaru, H. O. (2014). Measuring Nigerian Stock Market Volatility. Singaporean Journal of Business Economics and Management Studies, 2(8), 1-14 [Google Scholar] [Crossref]

45. Osei, K. (2006). Macroeconomic factors and the Ghana Stock Market. African Finance Journal, 8(1), 26-38. [Google Scholar] [Crossref]

46. Oroud, Y., Islam, M., & T. A, T. (2017). The Effect of Cash Flows on the Share Price on Amman Stock Exchange. American Based Research Journal, 6(7), 22-28. [Google Scholar] [Crossref]

47. Pal, K. & Mittal, R. (2011).Impact of Macroeconomic Indicators on Indian Capital Markets. The Journal of Risk Finance, 12(2), 84-97. [Google Scholar] [Crossref]

48. Paramin, K. (2013). The Factors Affecting Stock Market Volatility and Contagion: Thailand and South-East Asia Evidence. Journal of Economic Literature, 6(5), 478-539. [Google Scholar] [Crossref]

49. Profilet, K. A. & Bacon, F. W. (2013). Dividend Policy and Stock Price Volatility in the U.S. Equity Capital Market. Proceedings of ASBBS Annual Conference: Las Vegas, 20(1), 219 – 231 [Google Scholar] [Crossref]

50. Rajni, M. & Mahendra, R. (2007). Measuring Stock Market Volatility in an Emerging Economy. International Research Journal of Finance & Economics, 8(7), 126-133 [Google Scholar] [Crossref]

51. Soet, M., 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. [Google Scholar] [Crossref]

52. Ross, C. (1976). Inflation and Asset Prices in a Monetary Economy. Journal of Finance, 2(31), 471-83. [Google Scholar] [Crossref]

53. Samuelson, P. & Nordhaus W. (2010).Economics. New York: McGraw Hill [Google Scholar] [Crossref]

54. Shaharudin, R. S., Samad, F. & Bhat, S. (2009). Performance and Volatility of Oil and Gas Stocks: A Comparative Study on Selected O&G Companies. International Business Research, 2(4), 87-99. [Google Scholar] [Crossref]

55. Sifunjo, E. & Mwasaru, A. (2012). The Causal Relationship between Stock Prices and Exchange Rates in Kenya. Research Journal of Finance and Accounting, 3(7), 121-130. [Google Scholar] [Crossref]

56. Valipour, H., Shooshtarian, Z., and Ostovari, E. (2012). Relationship between Working Capital, Operating Cash Flows, and Operating Income: Empirical Evidence from Listed Firms in Tehran Stock Exchange. Asian Economic and Financial Review, 2(1), 20-29. [Google Scholar] [Crossref]

57. Wabwire, J. M., Owuor, G., Onyuma, S. & Njuguna, A. (2013). The Effect of Initial Public Offer Announcements on Market Returns of Listed Stocks at the Nairobi Stock Exchange. International Journal of Research in Management, 3(2), 84-119 [Google Scholar] [Crossref]

58. Wang, G. Y. (2010) Impacts of Free Cash Flows and Agency Costs on Firm Performance. Journal of Service Science and Management, 1(3): 408-418. [Google Scholar] [Crossref]

59. Wasseja, M. M., Njoroge, E. & Mwenda, S. N. (2015). Investigation of the Granger Causal Relationship between Macroeconomic Variables and Stock Prices in Kenya. International Journal of Business and Economics Research, 4(3), 98-108 [Google Scholar] [Crossref]

60. Zhou, H, Yang, S. and Zhang, M (2012).Relationship between Free Cash Flow and Financial Performance of Listed Real Estate Companies in China, Online Science Journal. 2(36), 331-335 [Google Scholar] [Crossref]

• Assessment of the Role of Artificial Intelligence in Repositioning TVET for Economic Development in Nigeria
• Teachers’ Use of Assure Model Instructional Design on Learners’ Problem Solving Efficacy in Secondary Schools in Bungoma County, Kenya
• “E-Booksan Ang Kaalaman”: Development, Validation, and Utilization of Electronic Book in Academic Performance of Grade 9 Students in Social Studies
• Analyzing EFL University Students’ Academic Speaking Skills Through Self-Recorded Video Presentation
• Major Findings of The Study on Total Quality Management in Teachers’ Education Institutions (TEIs) In Assam – An Evaluative Study