CASH FLOW ANALYSIS OF NEPALESE COMMERCIAL BANKS

Abstract

This study is undertaking to make an assessment, the effect of cash flow on financial performance of Nepalese commercial banks. The entire work has been divides into five broad chapters to study almost all aspects of cash flow on financial performance in general and its application in Nepalese Commercial Bank in particular. The study uses only secondary data; it does not cover the opinions and views of the banks concerned. The study covers only a ten-year period, i.e., from 2013/14 to 2022/23. If a longer trend had been using, a more accurate trend could have been analyzing. There are 20 commercial banks currently operating in Nepal. However, this study is limited to only three commercial banks in Nepal, namely, Nabil Bank Ltd., Himalayan Bank Ltd., and Kumari Bank. The study is carries out based on the information gathered. The study deals with only certain financial tools, such as statistical tools. EM, leverage ratio, firm size, and CFFA are relationships between cash flow and financial performance (ROA). CFOA and CFIA are therefore insignificant when compared to ROA. Therefore, CFOA and CFIA have no relationship between cash flow and financial performance (ROA). Again, in terms of ROE, the EM, leverage ratio, firm size, and CFFA are all positive and significant. So that, EM, leverage ratio, firm size, and CFFA are relationships between cash flow and financial performance (ROE). CFOA and CFIA are therefore insignificant in terms of ROE. Therefore, CFOA and CFIA have no relationship between cash flow and financial performance (ROE). The study concluded that the variables equity multiplier, firm size, leverage, CFOA, CFIA and CFIA are insignificant on financial performance (ROA). So that, these variables have no effect of cash flow on financial performance (ROA). Leverage, firm size, and CFOA, CFIA, and CFFA have no significant impact on financial performance (ROE). As a result, neither cash flow on financial performances are affected by these variables. The equity multiplier is significant for financial performance (ROE). As a result of this variable impact of cash flow on financial performance. Keywords: Return on Assets, Return on Equity, Cash flows from Operating Activities, Cash flows from Investing Activities, Cash flows from Financing Activities, Leverage Ratio, Firm Size, Equity Multiplier