Aggressive, Conservative and Moderate Policy in Working Capital Management and Firm's Free Cash Flow Yield (FCFP) Evidence from Tehran Stock Exchange
Journal Title: International Journal of Empirical Finance - Year 2014, Vol 2, Issue 3
Abstract
This paper investigates the impact of Working Capital Management (WCM) policy on returns of the listed firms on Tehran Stock Exchange (TSE) in the period 2007-2011. To this effect, 57 companies were initially selected of which 8 companies, after closer examination, for lacking specific WCM policy were excluded from the sample, and the remaining 49 companies were actually subjected to further analysis. With a cash flow approach, free cash flow yield or FCF to price per share (FCF/P) was applied to measurement of firm's return. The results suggested that majority of the companies followed a conservative WCM policy (CP), and quite remarkably, CP was the only policy which showed a significant, but negative, association with free cash flow yield (FCFP). The two other policies, i.e. aggressive policy (AP) and moderate policy (MP), had no significant effect on FCF/P.
Authors and Affiliations
Meysam Kaviani, Reza Shahmanosuri, Maryam Batebi, Seyed Reza Seyednezhad Fahim
Keywords
Related Articles
- EP ID EP27146
- DOI -
- Views 340
- Downloads 12
Financial Issues Facing Entrepreneurs
This research highlights the financial issues that Entrepreneurs may facing many difficulties and problems when they start their own business, the most important of these problems is the financial problems they may fac...
The Impact of UAE financial Markets Returns on Jordan Financial Market Returns
This paper inspects the impact of United Arab Emirates financial markets returns on Jordan financial market returns. The period of research will be from January 2004 till December 2013, the data will consist of monthly...
Performance Evaluation of Collective Investment Schemes in Ghana
The performance of collective investment schemes (CISs) provides investors with an opportunity to know how well or otherwise CISs perform before choosing a CIS to invest in. Raw returns are usually reported by CIS mana...
Stock Market Return Volatility and Macroeconomic Variables in Nigeria
This paper examines the impact of macroeconomic variables on stock market return volatility in Nigeria using GARCH-X model. Five macroeconomic variables: broad money supply, consumer price index, credit to the private...
Post Consolidation Performance and Earnings Quality of Listed Banks in Nigeria
This study looks at Post consolidation Performance and earnings quality of listed banks in Nigeria from 2008-2012. This exercise was done against the background of speculations that only eight (8) of the existing banks...