The Degrees of Operating Leverage with Changes in Cash Flows from Operating Activities

Abstract

The study population consisted business units listed in the Tehran Stock Exchange in the period from 1383 to 1388. In order to investigate the relationship between the degree of operating leverage and changes in cash flows from operating activities test Solidarity and the Durbin-Watson statistic is used. The results show that the changes in cash flow from operating activities and operating leverage, there is no correlation at 95 percent. But the 90 percent confidence level and have a significant negative relationship. To answer the next assumptions, the degree of operating leverage is divided into 5 floors and operating cash flow positive and negative changes are considered. When operating cash positive change is intended to increase the degree of operating leverage, stability factor is negative. This means that the positive changes in cash from operating activities and high operating leverage significant negative relationship at 90 percent. As well as the negative changes in cash from operating activities and low operating leverage significant negative relationship at 90 percent.