The effect of cash flow on investment level of listed companies in tehran stock exchange

Abstract

The goal of the present research paper is to study the effect of cash flow on investment levels in companies. 75 firms accepted in Tehran Stock Exchange were investigated for their performances during the years between 2004 and 2010. The year 2008 was assumed to be the index year. In this paper the effects of four variables related to operational cash flow, financial supply and investment on investments' levels were studied. These variables are operational incomes, operational profit, debt ratio, and change in tangible fixed assets. The results of the regression test showed that cash flow, previous operational incomes, operational profit, and the ratio of debts and tangible fixed assets have a positive and meaningful effect on investment levels in companies but the future operational income does not affect companies' investments.