The Effect of Cash Flows on the Share Price on Amman Stock Exchange

Author(s)

Yazan Salameh Oroud , Md. Aminul Islam , Tunku Salha T.A ,

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Volume 6 - July 2017 (07)

Abstract

This study investigated value relevance of cash flows in ASE, with emphasis on determining whether or not cash flow capture information that influence share prices of the firms listed on ASE. Consequently, the main objective of this research was to investigate and quantify effects of cash flows on the share prices of Jordanian companies. This study found that the cash flows have a statistically-significant effect on the share prices of the Jordanian companies listed on ASE and that the operating cash flows (OCFs), financing cash flows (FCFs), and investment cash flows (ICFs) together explain 13.27% of the variations in these prices. However, whereas the OCFs have positive effect on the share prices of these companies, the effect of FCFs is negative.

Keywords

ASE, Cash flows, financing Cash flows, Investing Cash Flows, Operating Cash Flows.

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