Cash Flow, Earning Opacity and its Impact on Stock Price Crash Risk in Tehran Stock Exchange

Hossein Jabbari (), Zeinolabedin Sadeghi () and Seyed Ali Askari ()
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Hossein Jabbari: Islamic Azad University of Kashan
Zeinolabedin Sadeghi: Shahid Bahonar University of Kerman
Seyed Ali Askari: Islamic Azad University

International Journal of Academic Research in Accounting, Finance and Management Sciences, 2013, vol. 3, issue 4, 138-145

Abstract: This study examined the role of operating cash flow and its ability in predicting and reducing stock price crash risk. The aim of this study was to investigate efficacy of operating cash flow on predicting and detecting stock price crash risk and also investigating role of operating cash flow on earning opacity in companies. The research methodology was of survey-explorative correlation type and the data were gathered using library method. The statistical population included companies accepted in Tehran Stock Exchange during 2006 to 2010, from which the sample was selected. Also, regression and correlation coefficients were used to examine correlation degree and relationship direction of the variables. The research results indicated a significantly inverse relationship between operating cash flow and stock price crash risk. Moreover, a significantly inverse relationship existed between operating cash flow and earning opacity; i.e. the higher the operating cash flow, the lower the earning opacity.

Keywords: Cash flow; earning opacity; stock price crash risk; Tehran Stock Exchange (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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