Cash Flow Management and Financial Performance of Listed Companies on Tehran Stock Exchange

Subject Areas :

Fatemeh  Sarraf ¹ (Assistant Professor, Islamic Azad University South Tehran Branch)
Maryam  Salehi ² (MA student)

Received: 2015-09-24 Accepted : 2015-09-24 Published : 2014-09-23

Keywords: Financial Performance, cash flow management, Days of Sales Outstanding (DSO), Days of Inventory Outstanding (DIO), Days of Payables Outstanding (DPO), Cash Conversion Cycle (CCC), Operating Cash Cycle (OCC),

Abstract :

The purpose of current research is evaluating cash flow positions of a firm via composite measures and metrics such as Days of Sales Outstanding (DSO), Days of Inventory Outstanding (DIO), Days of Payables Outstanding (DPO), Cash Conversion Cycle (CCC), Operating Cash Cycle (OCC) and the effect of these changes on the firm financial performance. For this purpose, the listed companies in Tehran Stock Exchange have been investigated. In order to examining the relation between cash flow management and firm financial performance, linear regression have been utilized. In this research we use eight variables and this study attempts to address six hypotheses. The samples including 67 firms which are studied during 2009-2013 and consists of twenty periods of quarterly data. The findings indicates that there is a meaningful relation between Days of Inventory Outstanding (DIO), Days of Payables Outstanding (DPO), Cash Conversion Cycle (CCC), Operating Cash Cycle (OCC) and financial performance, but there isn’t any meaningful relation between Days of Sales Outstanding (DSO) and firm financial performance.