The relationship among the cash components of profit, the stability of profit and the probability of bankruptcy of companies listed in Tehran Stock Exchange

Subject Areas : Financial Markets and Institutions

Amin Ghamari Moghaddam ¹ , Mahmoud Lari Dasht Bayaz ² , Habibollah Nakhaei ³

1 - Department of Accounting, Ghaenat Branch, Islamic Azad University, Ghaenat, Iran.
2 - Department of Accounting, Ferdowsi University, Mashhad, Iran.
3 - Department of Accounting, Birjand Branch, Islamic Azad University, Birjand, Iran.

Received: 2022-06-24 Accepted : 2022-10-23 Published : 2022-11-22

Keywords: Accruals, profit, Quality, bankruptcy, Financial Distress, cash components of profit, profit stability,

Abstract :

Purpose: The purpose of this study is to the relationship Among the stability of profit components and cash components of interest and their relationship with bankruptcy in the Tehran Stock Exchange.Methodology: In order to achieve the purpose of the research, a sample of 130 companies from among the companies of Tehran Stock Exchange and companies that are subject to Article 141 of the Commercial Law (bankrupt) and have left the Exchange and Securities Organization, for a period of 5 years between 2016-2020. Is. Data collection has been done using modern mortgage software and stock exchange organization websites. In this research, E-views 8 econometric software has been used for final analysis.Findings: The cash component of profit has a stronger relationship with the future profit of the company than the accrual component of profit and therefore has more stability than the accrual component of profit. Also, the result of the second hypothesis showed that the stability of the cash component of profit the stability of the cash component paid to shareholders is greater than the stability of other cash components. Finally, in the third hypothesis, the stability of the cash component of profit with the financial health of the company is greater than the stability of the accrual component of profit.Originality / Value: The present study provides evidence for the relationship between the cash components of profit, profit stability and the probability (prediction) of bankruptcy of accepted companies.

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