Open AccessRELATIONSHIP BETWEEN CASH FLOW MANAGEMENT AND FINANCIAL PERFORMANCE OF COMPANIES LISTED ON THE TEHRAN STOCK EXCHANGE
Author(s) -
Majid Ramazani,
Mahdi Salehi,
Mahmoud Laridashtbayaz
Publication year - 2019
Publication title -
zbornik radova ekonomskog fakulteta u istočnom sarajevu
Language(s) - English
Resource type - Journals
eISSN - 1986-6690
pISSN - 1840-3557
DOI - 10.7251/zrefis1817027r
Subject(s) - cash conversion cycle , cash flow forecasting , cash flow , cash management , business , operating cash flow , stock exchange , cash flow statement , finance , cash on cash return , financial system , cash and cash equivalents
Purpose–Cash is one of the most important assets to business firms. To evaluate a business firm, the competencies of a firm in creating and increasing the cash are of great importance for investors, creditors, and other beneficiaries. So, the main objective of the current study is to evaluate the relationship between cash flow management and firm financial performance in Iran. Design/methodology/approach – In the present study, using the data of 155 companies listed on the Tehran Stock Exchange during 2009-2016, panel data, and multivariable regression, we tried to analyze the relationship cash flow management and financial performance. Findings –The results obtained indicated that there is a relationship between the decrease (increase) of cash conversion cycle and operational cash conversion cycle and the improvement (debilitation) of financial performance. Moreover, the pending period for collection of sales revenue, cash conversion cycle, and operational cash conversion cycle is the Granger Cause of return on assets. Originality/value – Since a few studies have been conducted on cash flow management in Iran, the current study has covered the topic in Iran..