The Effect of Cash Flow on Share Price of the Jordanian Commercial Banks Listed in Amman Stock Exchange (original) (raw)
Related papers
The Effect of Cash Flows on the Share Price on Amman Stock Exchange
2017
This study investigated value relevance of cash flows in ASE, with emphasis on determining whether or not cash flow capture information that influence share prices of the firms listed on ASE. Consequently, the main objective of this research was to investigate and quantify effects of cash flows on the share prices of Jordanian companies. This study found that the cash flows have a statistically-significant effect on the share prices of the Jordanian companies listed on ASE and that the operating cash flows (OCFs), financing cash flows (FCFs), and investment cash flows (ICFs) together explain 13.27% of the variations in these prices. However, whereas the OCFs have positive effect on the share prices of these companies, the effect of FCFs is negative.
2020
This study aims to discuss how operating cash flow adequacy and effectiveness affect the stock price for a selected sample of 10 publicly held Jordanian Industrial companies in the Amman stock exchange for the period between 2012 and 2017. The paper used multiple linear regression methods. The result of the study data showed a statistically significant positive relationship in the adequacy of net operating cash flows and their effectiveness with the stock price, and the analysis also the variables are positively correlated with each other, and the regression analysis showed how operating cash flow related with the stock price. No one can deny the fact that there's a positive relationship between operating cash flow and the Stock price even if it was affected by a minor percentage but still has an impact on it, and that's what this study has proved. Keywords: operating cash flow, industrial companies, share price, Amman stock
Effect of Cash Flows on the Market Value of Jordanian Industrial Companies Stocks
The Journal of Social Sciences Research
The current study aims to assess the effect of cash flows of activities (operational, investment and financial) on market values in industrial companies stocks. The study adopted secondary sources for data collection from the annual reports of Jordanian industrial companies (52 companies) for the period 2007-2016. Furthermore, the study followed the descriptive analytical approach for data analysis in addition to utilizing the Gretle Stata model to test hypotheses. Results indicated a positive statistically significant effect for each of operational and investment activities on market value of industrial companies, while there was a negative relationship between financial activities and market value of industrial companies.
International Review of Management and Marketing, 2019
The study aimed at identifying the impact of some accounting indicators on the market price of share for the Jordanian commercial banks listed in Amman Stock Exchange (ASE) for the period 2006-2017. The study adopted STATA program in data processing and Random effect regression model was chosen to test the relationship between accounting indicators as independent variables include: return on equity (ROE), earnings per share (EPS), market price per share to book value per share (MPBV), dividend payout ratio (DPR), retained earnings per share (RPS), financial leverage (FL), current ratio (CR) and market price of share (MPS). The results show a positive and significant relationship between (ROE, EPS, MPBV, DPR) and MPS. Likewise, there is negative and significant relationship between retained earnings per share (RPS) and market price of share. On the other hand, the results show a negative and insignificant relationship between financial leverage(FL)and market price of share(MPS).The present study recommended that investors in Amman Stock Exchange (ASE) should be attention to the accounting indicators in general and (ROE, EPS, MPBV, DPR) in particular in order to build their investment decision.
Applied Finance and Accounting, 2017
This study aims to test the relationship between cash flows from operational, investment, and financing activities individually and jointly, and the stock returns of financial investment Banks on the Khartoum stock exchange. Using an analytical approach, the study analyzes the financial statements for 2010-2015. The statistical analysis showed no statistically significant relationship between cash flows from operations, investment, and financing activities individually or jointly, and stock returns of financial investment Banks on the Khartoum Stock Exchange. This study yielded several recommendations such as that the statement of cash flows requires a special awareness because it provides important, quality information that reflects the ability of the firm to meet obligations and function as a going concern, which is useful for users in making decisions.
The Impact of Operating Cash Flow on Corporate Profitability: Amman Stock Exchange case study
Journal of Economics and Administrative Sciences (JEAS), 2024
The problem of the study is the challenges faced by the growth of different sectors, which requires the identification of an appropriate operating cash flow policy to increase corporate Profitability. Unbalanced policies followed in operating cash flows can negatively affect companies' Profitability. The study's objective is to investigate the impact of operating cash flow on the Profitability of companies in different sectors listed on the Oman Stock Exchange. For five years (2017–2021) for 71 companies. In these sectors, Profitability and metrics have been used carefully. To show how these elements affect the success of each of these sectors? It is because investors can use this information to make sound investment decisions using different operating cash flow methods to evaluate company profitability. The researchers created a checklist to test the research hypothesis, in which each operating cash flow (OCF) was used as an independent variable. (Return on Assets (ROA) and Return on Equity (ROE)) was determined as the type of firm Profitability, which is the dependent variable. The results are shown through two models. Data using descriptive statistical analysis. Regression Approaches Using EViews 12, Given that the data included both time series and cross-sectional characteristics, fixed least squares (PLS) regression effects models were used to estimate the study models. The results reveal that operating cash flow has an impact of 57.9% on ROA, a measure of corporate Profitability, and other variables have an impact of 42.1% that is not mentioned. Meanwhile, the independent variable affects ROE by 57.7% and other variables by 42.3%.
Journal of Production and Industrial Engineering, 2023
The current study's goal was to ascertain the market's impact on profitability and liquidity metrics. Shares of commercial banks are worth. by disclosing This study was conducted in order to better understand the relationship between certain profitability and liquidity indicators that are important for determining a bank's capacity to create value. These indicators include the return on equity index, the return on assets, the ratio of cash assets to current liabilities, the ratio of total loans to total deposits, and the market value as determined by the closing price.and in order to achieve the goals and hypothesis of the research, it was Selection of a bank (Middle East Commercial, National Commercial, Iraqi Islamic, Baghdad Commercial, National Islamic, Elaf Islamic) and relied on the financial data of the research sample banks, and in order to process the data, Financial equations and statistical techniques were used, and the results were extracted using the program (SPSS.V.23), relying on the multiple and simple regression method to test the research hypotheses. The first main hypothesis' results showed a strong correlation between profitability indicators (ROE, ROA) and the market value index of the share price by about 77%, and the first subhypothesis' results showed a significant relationship between pro While the second key hypothesis' findings revealed a substantial correlation of roughly 88% between liquidity indicators and the share price's market value index, and the first sub-hypothesis' findings revealed a correlation between profitability measures of roughly 29% and 57%, respectively, which was considered significant. The study produced a number of conclusions, the most significant of which is that there is no significant relationship between the first main hypothesis and the first and second sub-hypotheses, nor between the second main hypothesis and the first and second sub-hypotheses, despite the fact that there is a correlation between the variables because the significance is higher than the 0.05 threshold assumed by the researcher in both hypotheses. Even though the share's book value is one dinar, the researcher advised commercial banks' management to stop issuing shares because they trade for less than that amount.
2014
This study is attempted to identify the quantitative factors that influence share prices for the listed banks in Amman Stock Exchange over the period 2005-2011 using empirical analysis of a set of independent and dependant variables. In the present study, the ratio analysis, Correlation and a linear multiple regression models have been selected to measure the individual as well as combined effects of explanatory variables on the dependant variables. The empirical findings shows that, there is a positive correlation between the independent variables DPS (correlation coefficient =.51), EPS (correlation coefficient =.84) BV (correlation coefficient =.81), PE (correlation coefficient =.81) and S (correlation coefficient =.57) and dependant variable MP and it is also significant at 1% probability level. However, further empirical findings that, there is a significant positive relationship between EPS and the MP of the listed banks in Jordan. This is evident in the t-statistics value of 2...
Cash flows, capital structure and shareholder value: Empirical evidence from Amman stock exchange
The current study links the information contents of the three main financial statements in a balanced panel data model to empirically examine the effect of cash flows per share and capital structure on shareholder value. The results of the study are based on a sample of 270 firm-year observations from the Jordanian commercial banks and insurance companies that listed on Amman Stock Exchange (ASE) from 2011 to 2019. Based on the Fixed Effect Model (FEM) with Driscoll-Kraay standard errors, the empirical results show that cash flows from operating activities per share had a positive and significant relationship with shareholder value, whereas both the cash flows from investing and financing activities per share had negative but insignificant relationship with shareholders' value. Results also show that capital structure had a negative but insignificant relationship with shareholder value. Finally, the results indicate that dividend per share had a positive and significant relationship with shareholder value. Accordingly, decision-makers should direct cash to efficient investment projects in order for cash outflows from investing activities to create value to shareholders and to generate positive cash flows from financing activities. Similarly, an appropriate capital structure should be selected to create value for shareholders.
This paper aims to study the effect of corporate financial performance on stock prices and consequently investors' decisions. The Jordanian banks enlisted in Amman Stock Exchange were studied over the period 2006-2017, as their average annual prices were linked in a multiple regression equation to the following independent variables (financial ratios), which are: Total Assets, Return on Equity, Return on Assets, Price-Earnings ratio, Price-to-Book ratio, Dividend per Share ratio and Debt ratio. Multiple regression analysis was used by SPSS to test the equation and showed that there are significant positive relationships between the average annual stock prices and the total assets, the Price-to-Book ratio and Dividend/Share ratio, while indicated a negative relationship with the Debt ratio. The rest of the independent variables were insignificant to the annual average stock prices.