The Free Cash Flow Anomaly Revisited: Finnish Evidence

Annukka Jokipii and Sami Vähämaa

Journal of Business Finance & Accounting, 2006, vol. 33, issue 7‐8, 961-978

Abstract: Abstract: This paper examines the performance of an investment strategy based on free cash flows using financial statement data of Finnish companies during the period 1992‐2002. The analysis in this paper is motivated by the so‐called free cash flow anomaly previously documented e.g. in Hackel, Livnat and Rai (2000). Using annual financial statement information, we identify large‐capitalization companies with positive free cash flows, low free cash flow multiples, and low financial leverage. Since a portfolio of these companies is found to consistently outperform the market index, our results suggest that the free cash flow anomaly also exists in the Finnish stock market.

Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.1111/j.1468-5957.2006.00620.x

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jbfnac:v:33:y:2006:i:7-8:p:961-978

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0306-686X

Access Statistics for this article

Journal of Business Finance & Accounting is currently edited by P. F. Pope, A. W. Stark and M. Walker

More articles in Journal of Business Finance & Accounting from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().