Operating Cash Flow Research Articles

Impacts of ESG Factor on Corporation Evaluation: Evidence from BYD’s Acquisition of Xi’an XIVO Bus

As a matter of fact, ESG factor shows a great importance in corporation valuation. This paper combines the collective consciousness of global sustainability to find a new way of valuing companies in terms of their expressiveness in the three directions of environment, social responsibility, and corporate governance and conjunction with the traditional income approach. The role of ESG factors is incorporated into calculating the operating revenue growth rate by taking the acquisition of Fresh XIVO Bus Group by BYD Company Limited, one of the most ESG-representative new energy automobile companies in China, as an example. Firstly, we compare the profitability of the enterprise before and after the acquisition to discuss the impact of ESG behaviors on the enterprise, then construct a DCF model to predict the cash flow performance in the next five years after the acquisition, and finally indicate the market value of the enterprise under the role of ESG through discounting. According to the analysis, strong ESG performance has helped BYD offset some of the pressures that existed due to the retreat of government subsidies. BYD will start with a slight deceleration but continue to thrive over the next five years.

PENGARUH LABA BERSIH DAN ARUS KAS TERHADAP HARGA SAHAM PADA PERUSAHAAN SUB SEKTOR KIMIA YANG TERDAFTAR DI BURSA EFEK INDONESIA

This study aims to determine the effect of Net Profit, Operating Cash Flow (AKO), Investing Cash Flow (AKI), and Financing Cash Flow (AKP) on Stock Prices of the chemical sector listed on the BEI for the 2016-2020 period with a population of 12 companies and 45 samples for 5 years. The data analysis in this study is a statistical analysis by collecting data through the data testing stage, namely: Normality Test, Multicollinearity Test, Heteroscedasticity, Auto-correlation Test, Regression Analysis Method, and Hypothesis Testing Test (partial and simultaneous) using the SPSS 25 software. The results of this study show that Net Income and Investing Cash Flow (AKI) have a significant effect on Stock Prices, meanwhile, Operating Cash Flow (AKO), and Financing Cash Flow (AKP) have no significant effect on Stock Prices. Net Profit, Operating Cash Flow (AKO), Investing Cash Flow (AKI) and Financing Cash Flow (AKP) simultaneously have significant effects on Stock Prices. Investing Cash Flow (AKI) is the dominant factor influencing Stock Price.
 Keywords: Net Profit; Operating Cash Flow; Investing Cash Flow; Financing Cash Flow, Stock Prices

Operating Cash Flows, Foreign Ownership, and Solvency on Tax Avoidance

The government uses tax collection as a strategy to increase national income, but companies are trying to reduce the amount of tax that must be removed. This is what causes the practice of tax avoidance. The focus of this research is how factors such as operating cash flow, foreign ownership, and solvency affect tax avoidance. This study applied a purposive sampling technique for the sample, with a total of 18 companies selected as research objects from 2017 to 2021 and obtained 87 observational data from companies in the mining industry sector listed on the IDX. The data is examined using a technique called panel data regression analysis using Eviews 12 in its processing. The results reveal that operating cash flow, foreign ownership, and solvency affect simultaneously. However, partially operating cash flow has an effect on tax avoidance and for foreign ownership and solvency does not partially affect tax avoidance. Keywords: Tax Avoidance, Operating Cash Flow, and Foreign Ownership, Solvency

Operating Cash Flow Analysis as a Financial Performance Measurement Tool

The purpose of this study is to analyze and determine the current ratio obtained at PT Siloam International Hospitals Tbk in 2019 – 2021. The method used in this study is descriptive qualitative research method. From the results of the study, it can be concluded that the financial performance of PT Siloam International Hospital.Tbk in 2019-2021 is assessed from the operating cash flow ratio is stated to be not good, the performance is said to be not good so that the company must strive to increase cash from operating activities so that in the future the company's cash flow can run smoothly.

Free Cash Flow Disclosure in Earnings Announcements

ABSTRACT More companies are disclosing free cash flow in their earnings announcements. Companies choose a range of definitions, almost none of which correspond to the theoretical finance definition. The most common definition (in 40 percent of free cash flow disclosures) is operating cash flow minus gross capital expenditures. From discussions with managers, this definition is chosen largely to keep things simple, especially given the lack of time to explain subtle complexities to investors. There is evidence of both opportunistic and information motives in the choice to disclose. Information variables, such as capital intensity and low-quality earnings, explain at least as much of the disclosure decision as opportunism variables in all estimations. Opportunism is relatively more evident within initial disclosures, which are more likely when earnings decline and free cash flow is positive or increasing.

Analisis Arus Kas Operasi, Leverage, Likuiditas, Pertumbuhan Perusahaan terhadap Revaluasi Aset Tetap

The purpose of this study is to analyze the effect of operating cash flow, leverage, liquidity and company growth on fixed asset revaluation. In this study, there were 4 companies that met the criteria from a total observation of 46 companies with the object of research being transportation subsector companies listed on the Indonesia Stock Exchange (IDX) during the period 2014 to 2021. The results of this study indicate that the operating cash flow variable has a negative effect on revaluation. fixed assets, leverage has no effect on fixed asset revaluation. The variable liquidity has a negative effect on the revaluation of fixed assets. Taken together operating cash flow, Leverage, Liquidity and growth of the company significantly influence the revaluation of fixed assets. This research can be taken into consideration for investors and shareholders to be more careful in receiving financial statement information provided by companies in making investment decisions. For companies to be able to determine positive policies that can maintain business continuity and meet the expectations of shareholders.

Strategy creation behaviour and “last gasp” digitalization as predictors of sales performance and cash flow

PurposeAlthough recent literature has examined diverse measures adopted by SMEs to navigate the COVID-19 turbulence, there is a shortage of evidence on how crisis-time strategy creation behaviour and digitalization activities increase (1) sales and (2) cash flow. Thus, predicated on a novel strategy creation perspective, this inquiry aims to investigate the crisis behaviour, sales and cash flow performance of 528 SMEs in Morocco.Design/methodology/approachNovel links between (1) aggregate wage cuts, (2) variable operating hours, (3) deferred payment to suppliers, (4) deferred payment to tax authorities and (5) sales performance are developed and tested. A further link between sales performance and cash flow is also examined and the analysis is conducted using a non-linear structural equation modelling technique.FindingsWhile there is a significant association between strategy creation behaviours and sales performance, only variable operating hours have a positive effect. Also, sales performance increases cash flow and this relationship is substantially strengthened by e-commerce digitalization and innovation.Originality/valueTheoretically, to the best of the authors’ knowledge, this is one of the first inquiries to espouse the strategy creation view to explain SMEs' crisis-time behaviour and digitalization. For practical purposes, to supplement Moroccan SMEs' propensity to seek tax deferrals, it is argued that debt and equity support measures are also needed to boost sales performance and cash flow.

Relevansi Informasi Akuntansi terhadap Harga Saham pada Sektor Pertambangan

Abstract
 The purpose of this study is to determine the relevance of the values of accounting information to the company's stock price. Each company does not provide direct authority in providing company financial information to external groups, namely investors and creditors. Therefore, they rely on information in the form of financial reports provided by management. The theory used in this research uses clean surplus theory, market efficiency theory, signal theory, and value relevance theory. Clean surplus theory provides assumptions about how to show the market value of a company based on the values contained in the balance sheet and income statement. The theory of market efficiency explains the security prices with published accounting information have value relevance. Signal theory explains the signal from the sender (the owner of the information) which provides relevant information to the receiver that is useful for increasing decision-making power. Value relevance theory explains about an information that is used to explain or describe the values of the company. This study uses secondary data observation techniques obtained from the annual financial statements of mining companies listed on the Indonesia Stock Exchange for the period 2012-2021. This research using a non-probabilistic sampling technique, using a purposive sampling method where in this method the sampling uses certain criteria. The total sample obtained reached 120 research samples. The data analysis techniques used include descriptive statistical analysis, coefficient similarity test, classical assumption test, multiple linear regression analysis, F statistic test, t statistic test, and coefficient of determination test. The results showed that the F test (α = 0.05) obtained a significance value of 0.000 so it can be said that the test is acceptable. Based on the t test, the value of significance Book Value Per Share (BVPS), Investing Cash Flow (CFINV), and Financial Cash Flow (CFFIN) each of 0.000, 0.000 and 0.010 so that H2, H4, and H5 are accepted. However, the value of significance for the Earning Per Share (EPS) and Operating Cash Flow (CFOPS) variables each of 0.144 and 0.304 so that H1 and H3 are rejected.

Human Capital Efficiency, Free Cash Flow, Corporate Sustainability Performance and Internal Auditors

Corporate Sustainability Performance is linked to the company's business strategy, which aims to benefit stakeholders while improving people's lives and protecting the environment. This study aims to examine the effect of Intelectual Capital and Free Cash Flow on Corporate Sustainability Performance with Internal Auditors as the moderating variable in this research. Intellectual Capital is proxied by Human Capital Efficiency, Structural Capital Efficiency and Capital Employed Efficiency. Meanwhile, Corporate Sustainability Performance is proxied by the CSR index which is based on the 2016 Global Reporting Initiative Standard. The population of this study are companies included in the LQ45 Index during the 2017- 2021 period. The sample was selected using purposive sampling method and 20 companies were selected as the research sample. The results of this study indicate that Human Capital, have no significant effect on the Company's Sustainability Performance. Meanwhile, Free Cash Flow has a significant positive effect on the Company's Sustainability Performance. Internal auditors can weaken the relationship between Human Capital and Corporate Sustainability Performance, the relationship between Free Cash Flow and Corporate Sustainability Performance. Meanwhile, the Internal Auditor can strengthen the relationship between Capital Employed and Corporate Sustainability Performance. The results of this study have an impact on company management to consider the company performance and as information for investors in determining investment decisions.

Modelling the domino effect of advance payment system on project cash flow and organisational performance

PurposePrevious studies have postulated that an advance payment system (APS) positively impacts the contractor's working capital and is paramount to ensuring an efficient and effective project cash flow process. However, scant research has been undertaken to empirically establish the cash flow performance and domino effect of APS on project and organisational performance.Design/methodology/approachThe epistemological design adopted a positivist philosophical stance augmented by deductive reasoning to explore the phenomena under investigation. Primary quantitative data were collected from 504 Construction Industry Development Board (CIDB) registered contractors (within the grade bandings 1–9) in South Africa. A five-point Likert scale was utilised, and subsequent data accrued were analysed using structural equation modelling (SEM).FindingsEmergent findings reveal that the mandatory use of an APS does not guarantee a positive project cash flow, an improvement in organisational performance or an improvement in project performance.Practical implicationsThe ensuing discussion reveals the contributory influence of APS on positive cash flow and organisational performance, although APS implementation alone will not achieve these objectives. Practically, the research accentuates the need for various measures to be concurrently adopted (including APS) towards ensuring a positive project cash flow and improved organisational and project performance.Originality/valueThere is limited empirical research on cash flow performance and the domino effect of APS on project and organisational performance in South Africa, nor indeed, the wider geographical location of Africa as a continent. This study addresses this gap in the prevailing body of knowledge.

The Effect of Magnitude of Operating Cash Flow and Accrual Earnings on the Level of Earnings Persistence

This research aims to disclose the magnitude of operating cash flow and accrual earnings in affecting the level of earnings persistence. The sample of this research was manufacturing firms listed in Indonesia Stock Exchanges. The nexus between variables was tested using random effect model. This research demonstrated that the magnitude value of manufacturing firms is positive on average in the accrual earnings, operating cash flow, and earnings persistence. The result of testing the effect points out that accrual earnings and operating cash flow affect the earnings persistence positively. The level of the earnings persistence has been followed by the magnitude of accrual earnings and operating cash flow indicating that the higher the accrual earnings and operating cash flow, the more persistent the earnings gained by manufacturing firms.

Pengaruh variabel keuangan & non-keuangan terhadap financial distress

This study aims to provide empirical evidence of the ability to predict financial distress using financial variables (current ratio, cash flow operation, leverage, gross profit margin, and return on assets) and non-financial variables (going concern opinion, audit report lag, opinion shopping, the additional state capital, and subsidies). Model testing uses three steps. First, financial ratios (CR, CFO, LEV, GPM, ROA); second, non-financial ratios (GCO, ARL, SHOP, ASC, SUB); and third, all variables at once. This study uses panel data (2011-2020) with a sample size of 50 Indonesian SOEs. Data analysis uses ordinal logistic regression. The first test results show that CR and ROA positively affect financial distress, while LEV and GPM have a negative effect. The second test results show ARL has a negative effect, while SHOP and SUB have a positive effect. Meanwhile, the third test results show LEV, GPM, and ASC have a negative effect, while ROA and SUB have a positive effect. Based on the r-squared and correctly predicted values, the third model test results are better than the first and second models. Statistically, the ability to predict financial distress that combines financial and non-financial ratios is better than models that only use financial and non-financial ratios. Financial ratios are the most consistent predictor of financial distress in terms of significance.

Audit committee features and earnings management

PurposePast studies have investigated the relationship between audit committee features and earnings management and reported mixed and inconclusive results. Some studies have found a significant relationship, while others have not. This study aims to explain these mixed results in the literature by dividing earning management into two groups: accrual and real earnings management (at three levels of sales, general and administrative costs, production costs and cash flows operation) and re-examining the relationship. Design/methodology/approachThe statistical model used in this study is a multivariate regression model; further, the statistical technique used to test the hypotheses is panel data. FindingsThe findings show that both the audit committee members' financial expertise and the audit committee's size affect the accrual earnings management. However, the results show no meaningful relationship between the audit committee features and real-based earnings management at any levels of sales, general and administrative costs, production costs and cash flow operation. In addition, the findings suggest no meaningful relationship between the independence of the audit committee's members and accrual earnings management. In other words, not separating the earning management into ‘accrual’ and ‘real’ could be the critical factor for the reported mixed and inconsistent results in the literature. Practical implicationsThe findings of the current study provide an important guideline for investors and stakeholders to separate ‘accrual’ from ‘real’ earning management and pay more attention to the importance of audit committee features to limit the opportunities of earnings management. Indeed, by understanding the relationship between audit committee features and earnings management, investors and stockholders can make appropriate decisions regarding the optimal choice of funds. Originality/valueDividing the earning management into two groups (accrual versus real) and re-examining its relationship with the audit committee features is new in this paper. Identifying one of the possible reasons for the past mixed and inconsistent results in the literature is also an incremental contribution provided by this study.

Untangling the Puzzle of Cash Holding Net Working Capital & Financial Performance: A Case of Pakistan Stock Market

Purpose:This study examines the impact of liquidity, cash flow operations, and cash holding on a firm’s profitability, with a moderating role of net working capital.The trade-off and pecking order theories are studied to formulate hypotheses to test the explanatory variables that affect a firm’s profitability of companies in Pakistan Stock Market.
 Methodology:The quantitative approach was used in this study and the panel data of selected companies were extracted from the Osiris database from 2009 to 2018.
 Findings:The results show a significant positive connection between liquidity, cash flow operations, cash holdings, net working capital and ROA. As a result, the study’s model was accepted, explaining that liquidity, cash holdings, and cash flow operations positively and significantly affect the ROA.
 Implications/Originality/Value:Limited evidence is available regarding the impact of net working capital on the affiliation between cash holding and profitability within the Pakistan Stock Market. The present study endeavors to address the above gap by investigating the moderating impact of net working capital on the association between selected factors of cash holding and profitability.

Unemployment Risk and Debt Contract Design

ABSTRACT We examine how firms’ contractual relationships with their employees affect the design of their debt contracts, and the use of financial covenants in particular. Viewing the firm as the nexus of both explicit and implicit contractual relationships, we argue that managers cater to their employees’ preferences when negotiating contractual terms with creditors. We argue that an increase in unemployment-insurance benefits reduces employees’ cost of job loss, which, in turn, allows managers to take more risk. First, we show that more generous benefits are associated with a higher operating leverage, operating cash flow volatility, and product-development frequency. We then find that loans initiated following an increase in unemployment-insurance benefits include a higher proportion of performance, rather than capital covenants. Overall, our study demonstrates how the design of debt contracts changes in response to arguably exogenous changes in employees’ collective tolerance—and, in turn, managers’ preferences—for risk. JEL Classifications: M41; G32; J60.

Analysts’ perceptions of cash flow reporting: earnings reliability, confidence and implications for evaluating firm performance

PurposeThis study aims to provide insights into US and Australian analysts' views regarding the relative importance of disclosing the direct method (DM) or indirect method (IM) statement of cash flows and forecasting firm performance.Design/methodology/approachEvidence is collected from responses to 104 surveys and 52 interviews completed by US and Australian analysts from 2017 to 2022. The survey and interview questions are developed with reference to the literature.FindingsUS and Australian analysts believe that the DM format provides incremental benefits compared to the IM for (1) confirming the reliability of earnings; (2) improving earnings confidence; (3) more accurate ex ante forecasts of operating cash flow and earnings; and (4) identifying opportunistic accruals manipulation. Analysts view that DM disclosure can lower firm-level cost of equity, although US interviewees more uniformly expect lower costs of equity under DM disclosure when firms yield low earnings quality. DM disclosure is also more important during unstable economic periods, as proxied by COVID-19.Originality/valueLimited research currently exists regarding disclosure of the DM or IM and its impact on analysts' forecasting accuracy, earnings quality, economic uncertainty and cost of equity. Previous research has relied on archival research to examine differences between the DM and IM methods and are limited by data availability. Our findings are particularly relevant to the US market with few US firms reporting the DM format.

ANALYSIS OF CHANGES IN ACCOUNTING PROFIT AND OPERATIONAL CASH FLOW ON STOCK RETURNS

This study aims to determine the analysis of changes in accounting profit and changes in operating cash flow on the return of shares listed on the Indonesia Stock Exchange (IDX). The sample selection technique used was the purposive sampling method, obtaining a sample of 18 companies with 5 years of observation from 2017-2021, so that the total results of the observation data were 90 data. The data analysis method used is descriptive statistics, panel data estimation model selection, model suitability test, classic assumption test, panel data regression analysis and hypothesis testing using Eviews software version 12. Based on the results of the study partially, it shows that changes in accounting profit have no significant effect on stock returns and changes in operating cash flow have no significant effect on stock returns.

Analysis of cash flow from operating activities, cash flow from investing activities, cash flow from financing activities, gross profit margin, and earnings per share on the stock price

Our research aims to analyze whether operating cash flow, investment cash flow, financing cash flow, Gross Profit Margin, and Earnings Per Share have an impact on stock prices. Our research falls under quantitative research. The sampling was conducted using purposive sampling, resulting in 19 companies that fit the category. The hypothesis was tested using multiple linear regression. The research findings present various results. Therefore, the conclusion from the research is that operating cash flow and investment cash flow have a significant and insignificant impact on the stock prices of food and beverage companies, while financing cash flow, Gross Profit Margin, and Earnings Per Share do not have a significant impact on the stock prices of food and beverage companies.

Analysis on the Profit Recovery of China's Budget Airlines after the Epidemic -- A Case Study of Spring Airlines

The purpose of this paper is to explore the changes in profitability of Spring Airlines, the representative low-cost airline in China, after the epidemic and to explore the reasons behind the changes in profitability. I compared three years of operating income, operating profit and operating cash flow, plotted the time series of passenger number changes for 31 months starting from December 2019, collected from government websites and summarized the national relief policies for the airline industry after the outbreak. I find that both operating income and operating cash flow rise above pre-epidemic levels in 2021, mainly due to the recovery and rise in passenger numbers driven by the improvement in the epidemic and the strong growth forces inherent in the low-cost airline market; however, profits show the opposite trend, mainly because aviation fuel prices bottom out and then rise in 2020, driving up the company's operating costs and compressing its profits; I also explore the impact of policies and find that multi-faceted, aggressive policies do largely reduce the pressure on the company to survive during the epidemic.

Exploring the impact of cash flow, company size, and debt on financial performance in corporations

This paper investigates the impact of operating cash flows, company size, and debt (including both cash and operating flows) on the financial performance of Kosovo’s ten most prominent publicly traded companies. Various analytical techniques were employed for hypothesis testing, including OLS linear regression analysis, correlation analysis between variables, and statistical tests such as the T-test and Ratio test. The financial performance analysis involves utilizing Return on Assets (ROA) as the dependent variable, while the independent variables encompass operating cash flows (CFO), firm size, and financial leverage.The study’s findings reveal noteworthy insights. Although cash flow (p > 0.05) is not observed to have a significant impact, larger company size (p < 0.01) is associated with diminished financial performance. Conversely, higher debt leverage (p < 0.01) is linked to enhanced financial performance. Consequently, the results underscore the significant economic implications that firm size and financial leverage hold for the financial performance of corporations in Kosovo, as indicated by ROA.The observation that firms size plays a substantial role in financial performance aligns cohesively with established economic theory. As companies expand, they often encounter challenges related to efficient resource management.