International Journal of Nonlinear Analysis and Applications
Decision usefulness of the positive and negative operating cash flows: A mathematical approach
Document Type : Research Paper
Authors
Department of Accounting, Rasht Branch, Islamic Azad University, Rasht, Iran
Abstract
The principal goal of this article is to investigate the effect of operating cash flow on decision-making considering the variables of the financial statements in the listed companies on the Iranian stock exchange. From the viewpoint of accounting standards, information content is applied to the particulars that will result in the information presented within the financial report being useful in the decision-making. The amount of data content for accounting for making a useful decision was evaluated in this article using the Ohlson model (1995) [35]. To realize the research objective, financial reports from 167 enterprises were accepted/listed on the Tehran Stock Exchange between 2011 and 2020. In addition, the research hypothesis was tested by applying multiple regression models with mixed data. The results show that the variable “operating cash flow” has a significant influence on the relationship between earnings per share, the book value of the share, and the stock price. This matter is in line with the information content theory. In other words, operating cash flow includes information content and will lead to an improvement in effective decision-making.
Keywords
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Volume 13, Issue 2
July 2022Pages 3037-3048
- Receive Date: 01 November 2021
- Revise Date: 01 February 2022
- Accept Date: 09 February 2022