Mostafa Hashemi Tilehnouei; Javad Nikkar
Abstract
The ability to produce future cash flows is an important part of the decision-making mechanism of the various shareholders. If cash flows can be predicted appropriately, a significant part of the informational needs associated with cash flows will be provided. Some analysts and investors argue that cash ...
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The ability to produce future cash flows is an important part of the decision-making mechanism of the various shareholders. If cash flows can be predicted appropriately, a significant part of the informational needs associated with cash flows will be provided. Some analysts and investors argue that cash flows are the main criterion for valuation. In this regard, the objective of this study is to examine the impact of firm characteristics in predictable future cash flows from operating activities by employing present operating cash flow and profitability. For this reason, eight hypotheses were developed and information was analyzed for 127 firms listed in Tehran Stock Exchange for the period of between 2011 and 2020. The regression model was tested with fixed effect model using panel data. The findings of the study showed that the firm characteristics like size, level of competition and level of supervision have a positive impact on the predicting power of present operating cash flow and present profitability in anticipating future operating cash flow. By contrast, the outcomes disclose that characteristics such as company’s life will not have a significant effect on the predicting strength of present operating cash flow and present profitability to forecast future cash flow from operating activities.
Mohsen Rahmani; majid ashrafi; Parviz Saeidi; Jamadori Gorganli Doji
Abstract
The flow of information in the capital market is of strategic importance because it determines the path of investors' decisions. In this decision-making process, the managers of the companies can disclose timely and reliable information based on their cognitive and perceptual characteristics of capital ...
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The flow of information in the capital market is of strategic importance because it determines the path of investors' decisions. In this decision-making process, the managers of the companies can disclose timely and reliable information based on their cognitive and perceptual characteristics of capital market situations. This article aims to contribute to the capital market knowledge literature by presenting the framework of managers' inertia drivers in response to reliable disclosure of information. This study adopted mixed, both inductive and deductive approaches to develop an integrated framework, validate its practicability and verify its effectiveness in selected firms listed on Tehran Stock Exchange respectively. In developing the framework and implementation procedure, the study employed a systematic screening data collection (qualitative) approach to review the managers' inertia drivers. Then, in this study's second phase, the Interpretive Rating Process (IRP) and Fuzzy Reference System are used to develop the framework of managers' inertia drivers in response to reliable disclosure of information. The results of the study in the qualitative part indicate the determination of 8 driving areas of managers' inertia in the reliable disclosure of information. On the other hand, the results in the quantitative section showed that the most effective field in stimulating managers' inertia in the timely disclosure of information is managers' overconfidence excitability. Based on the results, it was determined that the excitability of managers' overconfidence in creating inertia causes managers' subjective estimates to cause exclusivity in information disclosure.