This study investigated the impact on investment returns of cash flow optimality in selected listed manufacturing companies in Nigeria. There were 66 manufacturing companies listed on the Nigerian stock exchange. For a span of 10 years, 25 of these manufacturing companies were deliberately chosen (2010-2019). The study used data collected from the selected manufacturing companies' reported financial statements. During diagnostic tests, panel data analysis was used and an application of the Hausman test offered the criteria for choosing between Random Effect Models and Fixed Effect Models. In order to determine between Random Effects and Pooled OLS, Jarque-Bera Normality, Breusch, and Pagan Lagrangian multiplier tests were performed to validate the Hausman test results. The study found that cash flow optimality, AdjR2 = 0.099; Wad-chi2(4, 245) = 22.22; P-value = 0.000), had a positive statistically relevant return on assets. In addition, the analysis showed that a positive statistical effect on Tobin's Q was demonstrated by cash flow optimality (AdjR2 = 0.130; F (4, 245) = 2.884; P-value = 0.025). The study therefore proposed that managers of manufacturing firms should ensure that all strategic decisions are channelled in this direction, because the nature of investment is the anticipated returns, and ensure that efficient resource management and cash flow are optimally controlled to meet investor return expectations.
Please see the link :- https://www.journalajeba.com/index.php/AJEBA/article/view/30247
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