Effect of Risk Management on Swing of Cash Flow and Net Income: Firms Listed in SEO

Document Type : Research Paper

Authors

1 Associate Professor of Accounting at Alzahra University

2 Master of Science in Banking and Banking and Ph.D. Student of Accounting at Alzahra University (Q)

Abstract

Diversified growth and complex business environment has increased the financial risk. When firms are faced with a variety of risk, they used to manage this risk by hedging instruments. Hedging instruments increase transparency and control swing of cash flow and net income in the firms. This paper investigates effect of risk management on swing of cash flow and net income with selected 100 firms for 1386 to 1391 with using of regression models in SPSS. Investment with requirement of hedging and risk management for controlling swing of cash flows and net income are no effect in Iran’s capital market but they are effective in future forecast of swing cash flows and controlling on it. Also three variables of stock price, opportunities for investment growth and net profit last year's swing are effective variables in controlling and forecast of net income and cash flow’s swing that emphasize on shareholders’ understanding effect from controlling of risk in firm. 

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References

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History

  • Receive Date: 14 September 2015
  • Revise Date: 21 May 2016
  • Accept Date: 28 May 2016

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