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Strategic Cost Allocation in Selling and Distribution and Its Implications for Firm Operating Cashflow Performance

Chuka Peter Adibeli, Dr. Gilbert O. Nworie

Abstract

This study examined the effect of selling and distribution costs on firm operating cash flow performance of listed consumer goods firms in Nigeria. An ex-post facto research design was adopted, and the population comprised 20 consumer goods firms listed on the Nigerian Exchange Group, while a sample of 15 firms was selected using purposive sampling based on data availability from 2015 to 2024. Secondary data were obtained from audited annual financial statements of the selected firms. Panel Estimated Generalized Least Squares with robust standard errors was used to test the hypothesis. The finding revealed that selling and distribution costs positively and significantly affect firm operating cash flow performance (β = 0.283257, p = 0.0289). The study concluded that efficient allocation of selling and distribution costs enhances operating cash flow performance of listed firms in Nigeria. Thus, the management of listed consumer goods firms in Nigeria should strengthen and maintain efficient allocation of resources to selling and distribution activities, as evidence shows that such expenditures improve firm operating cash flow performance.

Keywords

Cost of Selling and DistributionFirm Operating Cashflow PerformanceStrategic Cost Allocation

References

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