Free Cash Flow Research Articles

Effect of free cash flow on the profitability of Nepalese commercial banks

This study investigates the impact of free cash flow on the profitability of Nepalese commercial banks. The study analyzes secondary data of 20 commercial banks from 2016/17 to 2020/21, using return on assets and return on equity as dependent variables, and free cash flow, cash flow from investing activities, cash flow from financing activities, dividend payout ratio, current ratio, and bank size as independent variables. The study finds that free cash flow has a positive effect on return on assets and return on equity, while leverage has a negative effect. Cash flow from investing and financing activities has a positive effect on return on assets, and the dividend payout ratio has a positive effect on return on equity. Bank size also has a positive effect on both return on assets and return on equity. However, the current ratio has a negative effect on both return on assets and return on equity. These findings suggest that commercial banks in Nepal can improve their profitability by effectively managing their free cash flow, cash flow from investing and financing activities, dividend payout ratio, and bank size, while minimizing their leverage and current ratio.

The Leverage, Arus Kas Bebas, Karakteristik Perusahaan, dan Manajemen Laba

This study aims to obtain empirical evidence and analyze the influence of leverage, motivational bonuses, free cash flow, firm size, board size, size of audit committee, independent commissioners, managerial ownership, and institutional ownership as independent variables on earnings management as a dependent variable. The company used in this research is non-financial companies that listed on Indonesian Stock Exchange (IDX) consistently from 2017 to 2020. There are 66 companies which have 264 data meet the criteria by using purposive sampling method. This study uses multiple regression models for data analyst and uses Modified Jones Model to estimate the value of discretionary accruals as the proxy of earnings management. The result of this study show that leverage, free cash flow, and board size have an influence on earnings management. However, other variables such as motivational bonuses, firm size, size of audit committee, independent commissioners, managerial ownership, and institutional ownership do not have an influence on earnings management.

Pengaruh Kepemilikan Institusional, Kepemilikan Manajerial dan Karakteristik Perusahaan terhadap Manajemen Laba

The purpose of this study was to obtain empirical evidence about the effect of the independent variables namely managerial ownership, institutional ownership, firm size, leverage, profitability, sales growth, and free
 cash flow on earnings management as the dependent variable. The population of this research are non-financial firms that listed in Indonesia Stock Exchange (IDX) during the period of 2019 until 2021. This study uses a total sample of 116 companies or 348 data for 3 periods. The sample selection in this study used purposive sampling and the analysis of this research test used multiple regression methods. The results of this study indicate that profitability and free cash flow have an effect on earnings management, meanwhile managerial ownership, institutional ownership, firm size, leverage, sales growth have no effect on earnings management.

Pengaruh Good Corporate Governance dan Karakteristik Perusahaan terhadap Manajemen Laba

This research aims to obtain empirical evidence on whether the components of good corporate governance and company characteristics influence earnings management. This research has eleven independent variables, namely audit quality, board of commissioners, managerial ownership, auditor independence, institutional ownership, audit committee, profitability, firm size, free cash flow, financial leverage, and sales growth. This research used a sample of 210 data from 70 manufacturing companies listed on the Indonesia Stock Exchange for the period 2019 to 2021. This study used a purposive sampling method for sample selection and used multiple regression for data analysis. The results of this research indicate that audit quality, profitability, and free cash flow affect earnings management. However, other independent variables such as the board of commissioners, auditor independence, audit committee, institutional ownership, financial leverage, firm size, sales growth, and managerial ownership do not affect earnings management.

Macro-economic variables and financing decisions of Nepalese non-financial firms

Purpose - The purpose of this paper is to examine the macro-economic indicators and firm characteristics that impact the financing decision of the Nepalese enterprises. Methodology - To evaluate the fundamental issues related to firm-specific variables on financing decision of Nepalese enterprises, the study used descriptive, and causal comparative research designs. The study used secondary data from 19 enterprises from 2001 to 2019 listed in NEPSE. Findings - The findings show that liquidity, inflation, profitability, growth opportunity, and gross domestic product are the major indicators for leverage measures. More specifically, it is found that firm size is more statistically significant for total debt financing, suggesting that firms with greater assets or turnover likely to have easier access to borrowing more fund from the capital market. Implication: As the linkage between growth opportunity and short-term debt is significant and negative implies that growth upsurges cost of financial distress, decreases free cash flow problems, and intensifies debt related issues. Thus, it is advised to the managers to use less debt and place larger value on stakeholder co-investment. Further, the finding also suggests that firms should employ less debt during the time of inflationary trend in the economy as inflation shows negative indication to debt financing. Limitations: The scope and sample size are the primary limitation of this study. The study comprises only non-financial firms of the NEPSE base listed firms. It also limits to secondary data analysis. Primary survey may produce recent scenario of the enterprises that they face in their financing decision. Originality/value: One field of study is believed to be the unique paradigm of macro-level indicators impacting leverage. The second is a piece of work that attempts to compare the results based on both the ratio of long-term to short-term debt and the total amount of overall debt.

Analisis Laporan Arus Kas dalam Menilai Kinerja Keuangan di Badan Penyelenggara Jaminan Sosial Kesehatan

The background of this research is the cash flow at BPJS Kesehatan has decreased every year due to the company’s expenses exceeding the income earned. This study aims to determine the financial performance of BPJS Kesehatan for the 2017-2021 period by using cash flow liquidity and cash flow flexibility ratios. The object of this research is the BPJS Kesehatan financial report for the 2017-2021 period which includes balance sheet, income statement and cash flow statement. The type of this research used is quantitative research with a descriptive approach. The type of data is secondary data. The results of this study are the cash flow liquidity ratio based on the operating cash flow ratio and the capital expenditure ratio in 2017 is good because it is above standard 1, but in 2018-2021 it shows a poor ratio because it is below standard 1, then the total debt ratio from 2017-2021 shows a poor ratio because it is still below standard 1. Based on the cash flow flexibility ratio, namely the cash flow adequacy ratio and the net free cash flow ratio of 2017-2021 shows a ratio below standard 1 which means BPJS Kesehatan financial performance is not good.

Good Corporate Governance, Free Cash Flow, dan Leverage terhadap Earning Management dengan Kualitas Audit sebagai Variabel Moderasi

This study examines the effect of good corporate governance, free cash flow, and leverage on earnings management with audit quality as a moderating variable in mining companies listed on the Indonesia Stock Exchange from 2015 to 2019. This study used secondary data from financial statements of mining companies on the Indonesia Stock Exchange accessed at www.idx.co.id. The data analysis method used was multiple linear regression methods with the help of Eviews. The results show that good corporate governance, free cash flow, and audit quality have an insignificant effect on earnings management, and leverage significantly adversely affects earnings management. The results also show that audit quality is a variable that can moderate the relationship between good corporate governance and earnings management but cannot moderate the relationship between free cash flow and earning management and leverage with earnings management. Companies must continue to manage the company well in order to achieve company goals

The Effect of Institutional Ownership, Free Cash Flow, and Asset Structure on Debt Policy with Profitability as a Moderation Variable (Case Study of Property & Real Estate Sector Companies Listed on the Idx for the 2019-2021 Period)

This study aims to examine the effect of institutional ownership, free cash flow, and asset structure on the debt policy of property & real estate companies listed on the IDX during the period 2019 to 2021, moderated by profitability. The sampling technique used was purposive sampling and 45 samples were obtained. The analytical method used is a multiple linear regression test with Moderating Regression Analysis (MRA). The results of the analysis show that asset structure has no impact on debt policy, while institutional ownership and free cash flow have a negative effect. The impact of institutional ownership on debt policy can be moderated by profitability. However, profitability cannot moderate the impact of free cash flow and asset structure on debt policy.

FACTORS INFLUENCING DIVIDEND PAYOUT POLICY: EVIDENCE FROM LISTED NON-FINANCIAL FIRMS OF THE ZAGREB STOCK EXCHANGE

This paper aims to assess the impact of financial factors on the dividend payout ratio, and the purpose is to research factors affecting dividend payout in less developed markets and compare them with the results of previous studies. We use the global research platform Screener.co, and the financial statements available on Zagreb Stock Exchange to collect the data. Our sample consists of companies listed on the Zagreb Stock Exchange that paid dividends at least once in the last three years. In the model applied, we covered five years (dividends paid from 2017 to 2021, based on financial fundamentals preceding dividends from 2016 to 2020) using hierarchical linear regression analysis that consists of four explanatory variables: return on equity, return on assets, financial leverage, and free cash flow to revenue. First, the research found high fluctuations in the dividend payout ratio and return on equity variability. Secondly, we found no statistically significant causality between the dividend payout ratio and explanatory variables. The results suggest that other long-term non-financial factors, such as the investors’ expectations, history of paying dividends, and large cash reserves backed by high retained earnings, may have a decisive impact on the dividend payout ratio rather than recent financial factors.

FİRMA DEĞERİNİ MAKSİMİZE EDECEK NAKİT AKIŞLARIN SİSTEM DİNAMİĞİ YAKLAŞIMIYLA ANALİZİ

In this study, it was practiced to adopt free cash flows to firm which is frequently used in calculating the firm value through the system dynamics model. For the study, a firm traded at Borsa Istanbul 100 Index (BIST-100) was chosen and the firm’s cash flow projection was created by analyzing its financial data. Future cash flows of the firm were exercised under certain scenarios via system dynamics model. The results exhibit that the future cash flows of the firm can be predicted successfully through the system dynamics model. It is considered that the system dynamics can be used as an efficient strategic management accounting technique and that it can provide the data which the business executives will require when making the optimal decisions maximizing the firm value.

Kebijakan Hutang Melalui Free Cash Flow, Kepemilikan Manajerial dan Kebijakan Deviden

This study aims to determine the relationship between the influence of Managerial Ownership, Dividend Policy and Investment Opportunity Set on debt policy with Free Cash Flow as a Moderating Variable in Manufacturing Companies listed on the Indonesia Stock Exchange (IDX) for the 2016-2020 period. The population in this study are manufacturing companies listed on the Indonesia Stock Exchange in 2016-2020, totaling 195 companies. The sample of this research is 66 companies in 5 years, so the total data obtained is 330 using purposive sampling technique. The data in this study is secondary data in the form of annual data obtained from the official website of the Indonesia Stock Exchange, the official website of the company concerned. The data analysis method used in this research is descriptive statistical test, classical assumption test, panel data regression analysis and hypothesis testing using Eviews 9. The results show that a) Managerial Ownership has a positive and significant effect on debt policy, b) Dividend Policy has no effect on debt policy c) Investment Opportunity Set has no effect on debt policy d) Free cash flow is able to strengthen the influence of managerial ownership on debt policy e) Free cash flow is not able to strengthen the effect of dividend policy on debt policy. f) Free cash flow is not able to strengthen the effect of investment opportunity set on debt policy.

Pengaruh Likuiditas, Struktur Aset, Profitabilitas dan Free Cashl Flowl terhadap Kebijakan Hutang

This study aims to examine the effect of Liquidity, Asset Structure, Profitability and Free Cash Flow on Debt Policy in Manufacturing Companies in the Consumer Goods Industry Sector Listed on the IDX for the 2018-2022 period. The data used in this research is quantitative data. The sampling technique using purposive sampling obtained a total sample of 155 data. The results showed that liquidity had no effect on debt policy, asset structure had no effect on debt policy, profitability had a significant effect on debt policy, and free cash flow had a significant negative effect on debt policy

DCF Valuation of Companies: Exploring the Interrelation Between Revenue and Operating Expenditures

This research explores some key aspects of the application of the DCF enterprise valuation model. The fundamental problems related to determining the value of companies are also discussed in a broader sense. The focus is on the analysis of the key input variables that determine the operating free cash flows. This is a particularly important part of the application of DCF valuation models because this is where the most serious prerequisites for deviating forecasts from reality are. This often leads to significant distortions in the final estimates. In this regard, a more in-depth study of the interdependence between the five main input variables, and in particular between revenues on the one hand and different groups of expenditures on the other, is needed. In this case specifically, the relationship between operating revenue and operating expenses was studied on the basis of summary data for all non-financial corporations in Bulgaria for the period 2008-2020. The results confirm the relationship between operating income dynamics and operating expenses dynamics in the medium and long term. This is a good argument that forecasting operating costs based on their historical averages as a percent of operating income is justified.

ANALYSIS OF COMPANY CHARACTERISTICS AND OWNERSHIP STRUCTURE OF DIVIDEND POLICY IN INDONESIA WITH FREE CASH FLOW AS MODERATING VARIABLE

This study examines the effect of ownership structure and company characteristics on dividend policy in companies listed on the Indonesia Stock Exchange with an observation period from 2015-2020. This study also interacts with the Free Cash Flow (FCF) variable with other company characteristic variables. The population in this research is all companies that pay dividends. Sampling method using purposive sampling. The variables used to test the dividend policy are managerial ownership, institutional ownership, profitability, leverage, investment opportunity set (IOS) and free cash flows (FCF). Processing and analysis of data using panel data regression with the help of E-Views software. In selecting the model, the Chow and Housman tests were first carried out. After that, the right model will be obtained to provide solutions to the problems in this study. The results of this study found that before the MRA test was carried out, the variables that significantly influenced dividend policy were Managerial Ownership and Free Cash Flow, while the Leverage, Institutional Ownership and IOS variables had no significant effect. After testing the variable MRA that is able to moderate the influence on dividend policy, namely Leverage peroxided by DER. This means that debt has no impact on dividend policy as long as there is enough FCF available to meet debt interest. While other variables are not significantly moderated by FCF.

DETERMINASI KEBIJAKAN UTANG PERUSAHAAN

This study examines the impact of tangibility, free cash flow, growth, and profitability on debt policy. Samples are manufacturing firms listed on the Indonesian Stock Exchange during 2017-2019. Purposive sampling is employed to acquire 163 manufacturing firms for the 2017-2019 period. The classical assumption test consists of normality, autocorrelation, multicollinearity, and heteroscedasticity tests. And to test hypotheses consisting of the t (partial) test. The data were obtained from companies’ annual financial reports. The results showed that tangibility affects debt policy, but free cash flow, company growth, and profitability do not affect debt policy. The value of a coefficient determination in this research reflects 0.0265. It means that tangibility, free cash flow, growth, and profitability have the role of 2.65 % debt against its policies.

The attack on share buybacks

AbstractCorporate share buybacks are under attack, mainly from the political left, but also to some degree from the right. Critics advocate increasing the tax on buybacks in the hope of inducing firms to invest more and in ways that benefit workers. This attack on buybacks reflects a misunderstanding of basic (textbook‐level) finance principles. The approach advocated by critics will backfire at growth‐stage firms, which will invest less, not more, because a payout‐tax increase will reduce the supply of equity infusions. At mature firms that are generating ample free cash flow, managers can easily evade the (unattractive‐for‐shareholders) real investments that critics desire by investing retained cash in financial assets. Buyback critics should recognise that punishing cash payouts per se would be counterproductive, and should focus instead on making a case for legislation that creates incentives that directly promote the specific behaviours they desire.

The Effect of Free Cash Flows on Stock Crash Risk with Focused on the Role of Earnings Smoothing

با توسعه بازار سرمایه در ایران، توجه به عواملی که به نحوی بر تصمیم­‌گیری فعالین بازار موثر است، از اهمیت ویژه‌ای برخوردار است و طی سال‌های اخیر، مساله ریسک سقوط قیمت سهام به­عنوان یکی از ریسک‌­های تاثیرگذار بر شرکت‌­ها، مورد توجه ذی‌نفعان و محققین قرار گرفته است. در پژوهش حاضر، تاثیر جریان‌های نقد آزاد بر ریسک سقوط قیمت سهام با تاکید بر نقش تعدیلی هموارسازی سود، بررسی شده است. برای این منظور با انتخاب 161 شرکت پذیرفته‌­شده در بورس اوراق بهادار تهران طی سال‌های 1394 تا 1400 این مساله مورد بررسی قرار گرفت. آزمون فرضیات پژوهش نیز ازطریق رگرسیون خطی چند متغیره بوده و داده‌­ها از نوع ترکیبی می­باشند. در این مطالعه برای تجزیه و تحلیل داده­‌ها از نرم‌افزار ایویوز10 بهره گرفته­‌شده­‌است. نتایج پژوهش حاکی از آن است که جریان­های نقد آزاد به طور مثبت و معناداری بر ریسک سقوط سهام شرکت­ها موثر بوده و همچنین، هموارسازی سود این ارتباط را به‌طور منفی و معناداری تعدیل می­کند

Analysis Managerial Ownership, Free Cash Flow And Debt On Dividends For Transportation And Infrastructure Companies In Indonesia

This study examines the effect of managerial ownership, free cash flow and debt on dividends in transportation and infrastructure companies in Indonesia. Sampling method use purposive and gotten 27 companies from 2015-2020. The data analysis method uses the Panel Data Regression analysis. The results of this study find that managerial ownership has a positive and significant effect, FCF has a negative and significant effect, while leverage proxy by DER has no significant effect on dividends. The results of this study indicate the occurrence of type I agency conflict in transportation and infrastructure companies in Indonesia.

A Case Study on Valuation of Tata Motors Ltd.

In this case study, the fundamental value of Tata Motors has been calculated using one of the most popular techniques of valuation, Discounted Cash Flow Valuation. Ravi Nigam, who is an equity analyst has been given the task to calculate the value of Tata Motors. The first step taken to calculate the value was to prepare the forecasted income statement and balance sheet. In order to do so, the first task was to forecast the sales of Tata Motors for the next coming five years. On the basis of forecasted sales, various items of expenses like the cost of goods sold and selling, general & administrative expenses were forecasted. Subsequently, Free Cash Flow to the Firm was calculated which was discounted by a weighted average of the cost of capital to arrive at the present value of Tata Motors. The terminal value and its present value has been also calculated to complete the valuation process.

Pengaruh Faktor Keuangan terhadap Manajemen Laba Menggunakan Pendekatan Teori Fraud Triangle

The objective of the research is to examine whether financial factors seen by fraud triangle theory perspective effect to earning management, within Good Corporate Governance as a moderator variable. Financial factor variables consists of Free cash flow as an opportunity in fraud triangle theory, leverage as a pressure and profitability as a rationalitaion from fraud triangle theory. This research is a quantitative research used descriptif method. The population on this study are banks that actively listed on the IDX period 2016 to 2018. This sample is taken by purposive sampling method within 102 bank samples. Data analysis used multiple linear regression and moderation regression. The results showed that free cash flow had a positive effect on earnings management, the leverage had no effect on earnings management, and the profitability had a negative effect on earnings management.