Analysis of The Effect of Inflation, Operating Cycle and Operating Cash Flow on Debt’s Term Structure

Abstract

Structure of capital is one of the important matters in every company. Choosing an appropriate capital structure is an important matter in determining the value of every company and this structure, is the combination of the company’s supply of the financial resources. Debts and the rights of the stock holder are components of capital structure. Type of debt used in the Company has influence on the company's risk. Some of the companies for the supplying required financial resources use current debts and financial risk is increased naturally, and some of them use non-current debts. Methodology: In this study the effect of operating’s cycle, operating cash flow and inflation during 1385 to 1392 is analyzed. The number of observations of this study including 98 companies and by using OLS method the hypotheses of the study is tested. Results: The results suggest there is a significant relationship between c operating cash flow and time deadline and there is no significant relation between operating cycle and inflation with the time deadline of the debts. Conclusion: Finally, there is a positive relation between operating cycle and debt’s term structure but not significant, and operating cash flow’s coefficient is 0.0893 and there is a significant and positive relation between operating cash flow and debt’s term structure, and there is an opposite relation between them, but it is not significant.