Free cashflow and firm performance: Evidence from sectoral levels for Vietnamese listed firms

Hau, Le Long

doi:10.24001/ijaems.3.4.2

Cited by 8 publications

(10 citation statements)

References 4 publications

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“…Hence, free cash flow is significantly giving a positive impact on firm performance. Our results are supported by a previous study by Hau (2017) which indicates that when a firm has investments opportunities, the free cash flow may significantly increase firm performance. This finding is also in line with the study by Wang (2010) and Gregory (2005) where free cash flows could render a firm with investment journal.ump.edu.my/jgi ◄ opportunities that would generate more value for the firm.…”

Section: Discussionsupporting

confidence: 90%

“…In this study, free cash flow has a significant positive impact on asset return. Our findings are supported by Hau (2017), who claims that when a firm has investment opportunities, free cash flow can significantly improve firm performance. This is also consistent with the study from Wang (2010) whereby there is a lack of evidence supporting the free cash flows hypothesis, where free cash flows could reduce for firms with investment opportunities which would generate more values for the firm.…”

Section: Findings and Discussionsupporting

confidence: 78%

“…There are many empirical investigations have been conducted and mostly in the developed countries (Antoniadis et al, 2008;Migunyi, Zanjirder and Gasemy, 2013;Wambua, 2013;Nobance, Ellili and Abraham, 2017;Hau, 2017;Kadiugloe et al,2017;Abdullah et al, 2019). According to Jensen's (1986) theory, having a big free cash flow might lead to a conflict within the company, such as between the interest manager and the shareholder, which will harm the company's performance.…”

Section: Free Cash Flow Agency Cost and Firm Performancementioning

confidence: 99%

“…According to Hau (2017), free cash flow control is usually one of the biggest challenges in organizations, since if a firm does not have an investment, retaining more cash will not help to increase firm performance. Furthermore, several proxy variables are recommended to measure agency cost which are total asset turnover, operating expense to sales ratio, administrative expense, earning volatility, advertising and R&D expense to sales ratio, and floatation cost.…”

Section: Free Cash Flow Agency Cost and Firm Performancementioning

confidence: 99%

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Analysing the Impacts of Free Cash Flow, Agency Cost and Firm Performance in Public Listed Companies in Malaysia

Sapuan

Wahab

Fauzi

et al. 2021

JGI

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This study intended to examine the relationship between free cash flow and agency costs towards firm performance based on the data from 350 public listed companies in Malaysia. The data was collected from year 2005 to 2015. There is a need to re-examine the free cash flow hypothesis and the agency theory based on Malaysian data as the results from previous studies shown a mix results.The findings shown free cash flow is significantly giving positive impact on firm performance. This result is contradict to free cash flow hypothesis, but it can occur due to, when the availability of investments opportunities that can be generated when firm more free cash flow that later able to increase firm performance. Meanwhile, total asset turnover has a positive impact on return on asset. However, the operating expenses ratio demonstrates that the operating expenses ratio has a negative impact on return on asset. The mix findings of agency cost are supported by previous studies.

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Section: Discussionsupporting

confidence: 90%

Section: Findings and Discussionsupporting

confidence: 78%

Section: Free Cash Flow Agency Cost and Firm Performancementioning

confidence: 99%

Section: Free Cash Flow Agency Cost and Firm Performancementioning

confidence: 99%

See 2 more Smart Citations

Analysing the Impacts of Free Cash Flow, Agency Cost and Firm Performance in Public Listed Companies in Malaysia

Sapuan

Wahab

Fauzi

et al. 2021

JGI

View full text Add to dashboard Cite

show abstract

“…The result showed a positive relationship between free cash flow and profitability. [18], conducted a study on the impact of free cash flows on the output of the Vietnam-listed manufacturing and real estate companies. The study revealed a positive relationship between cash flows across all industries and company profitability.…”

Section: Empirical Reviewmentioning

confidence: 99%

Financial Control Systems and Financial Systems Theory: Free Cash Flow and Profitability Nexus: a Comparative Study of Manufacturing Firms in Nigeria and Ghana

Nwuba

Omankhanlen

Chimezie

et al. 2020

Wseas Transactions on Systems and Control

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In Financial Systems, the impact of Free Cash Flow (FCF) on the performance of a company has been in the center of academic discourse in recent years. Several studies have tried to ascertain the nature and magnitude of the relationship between free cash flow and firm profitability with conflicting results coming from different scholars. The main objective of this research work was to examine the impact of FCF on the profitability of quoted manufacturing firms in the Nigerian and Ghana stock exchanges. Data were pooled from twenty (20) different companies (ten each from Nigeria and Ghana) for a period of six years (2012 – 2017). A panel data estimation model was used to measure the impact of FCF and other performance metrics on the Return on Assets (ROA), which is our chosen profitability measure. The results show a positive but insignificant relationship between FCF and ROA both for Ghana and Nigerian manufacturing firms. Also, sales growth showed a positive impact on profitability of both countries while leverage negatively impacted on profitability. with Ghana being significant at 5%. The implication of the findings of the study is that it makes no business sense for companies to keep piling up excess funds beyond that which is needed for transactional purposes. The similarity between the results from Ghana and Nigeria in most of the variables shows that the findings of this study can be generalized to other countries. Based on the findings of the study, we recommend that the management of companies should strive to keep only the minimum needed free cash flow while the rest should be invested in other projects with positive net present value

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Cash flow management, performance and risk: evidence from Greece

Rompotis

2024

EMJB

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PurposeI seek to identify whether cash flow management can affect the performance and risk of the Greek listed companies.Design/methodology/approachThis study examines the relationship of cash flow management with performance and risk, using a sample of 80 non-financial companies listed in the Athens Exchange. The study covers the period 2018–2022, and panel data analysis is applied. Both financial performance and stock return are taken into consideration, while risk concerns the volatility of the companies’ share prices. The various explanatory variables used include the net cash flow, free cash flow, cash conversion cycle days, cash flow from operating activities, cash flow from investing activities, cash flow from financing activities, inventory days, customer days and supplier days.FindingsThe empirical results provide evidence of a positive relationship between financial performance and net cash flow and free cash flow. In addition, operating cash flow is positively related to financial performance. The opposite is the case for investing and financing cash flow. Finally, some evidence of a negative relationship between financial performance and inventory and customer days is provided too. On the other hand, stock return and risk are not related to the cash flow management variables at all.Originality/valueTo the best of my knowledge, this is one of the few studies to examine the relationship of cash flow management with performance and risk, using data from the Greek stock market. The results can form an effective selection tool for investors seeking Greek companies with the highest financial performance potential, which may reward them with higher dividends.

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Free cashflow and firm performance: Evidence from sectoral levels for Vietnamese listed firms

Abstract: Abstract-

Cited by 8 publications

References 4 publications

Analysing the Impacts of Free Cash Flow, Agency Cost and Firm Performance in Public Listed Companies in Malaysia

Analysing the Impacts of Free Cash Flow, Agency Cost and Firm Performance in Public Listed Companies in Malaysia

Financial Control Systems and Financial Systems Theory: Free Cash Flow and Profitability Nexus: a Comparative Study of Manufacturing Firms in Nigeria and Ghana

Cash flow management, performance and risk: evidence from Greece

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