The Relationship between Operating Cash Flow and Corporate Liquidity – A Case Study of Steel and Cement Industry in Taiwan
| Autor: | CHEN, YU-CHUAN, 陳昱全 |
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| Rok vydání: | 2019 |
| Druh dokumentu: | 學位論文 ; thesis |
| Popis: | 107 A company’s liquidity can be defined as its ability to meet its short-term financial obligations or its ability to generate cash flow, and there are many factors that could materially affect, directly or indirectly, a company’s liquidity. Many companies and investors focus on cash flow from operations instead of net income because operating cash flow is not only the lifeblood of a company but also a sign of sustainable operations. A company with insufficient operating cash flow might become insolvent, it may default on its debt, and it may be unable to cope with unexpected financial emergencies or investments. Therefore, the purpose of this study was to understand the correlation between operating cash flow and corporate liquidity through regression. Furthermore, cash holdings are also very important to companies, companies that hold sufficient cash can be relatively flexible, and higher cash holding companies are most likely to overcome challenges. Hence, anther aim was to find out if cash holdings are related to future operating cash flows. The results, based on steel and cement industry in Taiwan, revealed that there was significant correlation between operating cash flow and corporate liquidity. In terms of short-term solvency, a company’s operating cash flow will increase when its short-term solvency gets better. Additionally, it was found that there was a negative correlation between cash holdings and future operating cash flows, which means that when cash holdings get higher, companies tend to maintain or reduce its future operating cash flows. |
| Databáze: | Networked Digital Library of Theses & Dissertations |
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