IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/116415.html
   My bibliography  Save this paper

Impact of Operating Cash Flows on Capital Spending and Dividends

Author

Listed:
  • Ali, Mazhar

Abstract

The purpose of this study is to assess the impact of operating cash flows on capital spending and dividends in the cement sector of Pakistan. Operating cash flow and capital spending has become one of the major decision making tool for the companies, investors and stakeholders in this sectors. In this study, operating cash flow has been used as independent variable, while capital spending and the dividends are used as dependent variables. The research approach is quantitative and simple random sampling technique has been used. However, data is collected through financial statements, which consist of 18 companies listed in Karachi stock exchange, and with the help of SPSS, hypotheses are tested. The findings of the study reflected that whether the cement companies in Pakistan give investment priority to the capital expenditures or the shareholders through dividends.

Suggested Citation

  • Ali, Mazhar, 2015. "Impact of Operating Cash Flows on Capital Spending and Dividends," MPRA Paper 116415, University Library of Munich, Germany, revised 19 Oct 2022.
    • Handle: RePEc:pra:mprapa:116415
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/116415/1/MPRA_paper_116415.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ahmad, Mashood & Ali, Syed Babar, 2008. "Technical Analysis in the Stock Markets of Pakistan: A Case of Commercial Banks," MPRA Paper 64521, University Library of Munich, Germany.
    2. M.Usman Aleem & Marria Purwani & Usman Ali & Syed Babar Ali 5 & Naeem Bhojani, 2018. "Power Of Training And Development On Employee Retention In Pharmaceutical Organization," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 14(2), pages 148-157.
    3. Hussain, Zahir & Ali, Syed Babar, 2009. "Implementation of Operational Risk Regime: A Case of Commercial Banks in Pakistan," MPRA Paper 64469, University Library of Munich, Germany.
    4. Syed Babar Ali & Manzoor A.Khalidi, 2020. "Valuation of Equity Securities, Private Firms, and Startups," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 16(1), pages 125-140.
    5. Robyn McLaughlin & Assem Safieddine & Gopala K. Vasudevan, 1996. "The Operating Performance of Seasoned Equity Issuers: Free Cash Flow and Post-Issue Performance," Financial Management, Financial Management Association, vol. 25(4), Winter.
    6. Zia Ullah & Mohammed Ali Bait Ali Sulaiman & Syed Babar Ali & Naveed Ahmad & Miklas Scholz & Heesup Han, 2021. "The Effect of Work Safety on Organizational Social Sustainability Improvement in the Healthcare Sector: The Case of a Public Sector Hospital in Pakistan," IJERPH, MDPI, vol. 18(12), pages 1-18, June.
    7. Steven Freund & Alexandros P. Prezas & Gopala K. Vasudevan, 2003. "Operating Performance and Free Cash Flow of Asset Buyers," Financial Management, Financial Management Association, vol. 32(4), Winter.
    8. R. Glenn Hubbard, 1998. "Capital-Market Imperfections and Investment," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 193-225, March.
    9. Fernandez, Pablo, 2006. "Cash flow is cash and is a fact. Net income is just an opinion," IESE Research Papers D/629, IESE Business School.
    10. Rizvi, Aoun & Ali, Syed Babar, 2011. "Risk Taking Behavior of Investors of Pakistan," MPRA Paper 64342, University Library of Munich, Germany.
    11. Poterba, James M., 1995. "Capital budgets, borrowing rules, and state capital spending," Journal of Public Economics, Elsevier, vol. 56(2), pages 165-187, February.
    12. M.Usman Aleem & Marria Purwani & Usman Ali & Syed Babar Ali 5 & Naeem Bhojani, 2018. "Power Of Training And Development On Employee Retention In Pharmaceutical Organization," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 14(2), pages 14-12.
    13. Ahmad, Baseer & Ali, Syed Babar, 2012. "Do Individual Investors in Pakistan Prefer Dividends?," MPRA Paper 64205, University Library of Munich, Germany.
    14. Lang, Larry H. P. & Stulz, ReneM. & Walkling, Ralph A., 1991. "A test of the free cash flow hypothesis*1: The case of bidder returns," Journal of Financial Economics, Elsevier, vol. 29(2), pages 315-335, October.
    15. Ali, Syed Babar, 2012. "Corporate Governance and Accounting Practices in Pakistan," MPRA Paper 64713, University Library of Munich, Germany.
    16. Chung, Richard & Firth, Michael & Kim, Jeong-Bon, 2005. "Earnings management, surplus free cash flow, and external monitoring," Journal of Business Research, Elsevier, vol. 58(6), pages 766-776, June.
    17. Ali Zaidi, Syed Najaf & Ali, Syed Babar, 2006. "Risk and Scope of Debit Check Card in Competitive Market of Pakistan," MPRA Paper 64456, University Library of Munich, Germany.
    18. Heitor Almeida & Murillo Campello & Michael S. Weisbach, 2004. "The Cash Flow Sensitivity of Cash," Journal of Finance, American Finance Association, vol. 59(4), pages 1777-1804, August.
    19. Gayané Hovakimian, 2009. "Determinants of Investment Cash Flow Sensitivity," Financial Management, Financial Management Association International, vol. 38(1), pages 161-183, March.
    20. Syed Babar Ali & Manzoor A.Khalidi, 2020. "Valuation of Equity Securities, Private Firms, and Startups," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 16(1), pages 16-19.
    21. Ali, Syed Babar, 2012. "Quality of Internal Risk Rating Frameworks at Commercial Banks in Pakistan," MPRA Paper 55117, University Library of Munich, Germany.
    22. Ali, Madiha & Ali, Syed Babar, 2014. "The Impact of Working Capital Management on Firm Profitability and Fixed Investment in Pakistan," MPRA Paper 64520, University Library of Munich, Germany.
    23. Armen Hovakimian & Gayané Hovakimian, 2009. "Cash Flow Sensitivity of Investment," European Financial Management, European Financial Management Association, vol. 15(1), pages 47-65, January.
    24. Jarrad Harford, 1999. "Corporate Cash Reserves and Acquisitions," Journal of Finance, American Finance Association, vol. 54(6), pages 1969-1997, December.
    25. Umair Baig & Dr. Muhammad Arsalan Hashmi & Syed Babar Ali & Dr. Saba Zehara, 2020. "Exploratory Sequential Mixed Methods In Doctorate Research: Extended Application Of Constructivist Grounded Theory," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 16(2), pages 47-65.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Farhan, Jamil Ahmed, 2006. "Islamic Leasing and Auto Financing System in Pakistan in Compliance with Islamic Sharia," MPRA Paper 116439, University Library of Munich, Germany, revised 03 Jul 2022.
    2. Arshad, Muhammad Nadeem, 2006. "Comparison of Products & Services Offered by Local and Foreign Banks in Pakistan," MPRA Paper 116411, University Library of Munich, Germany, revised 03 Jan 2023.
    3. Khan, Muhammad Umer, 2016. "Environmental Concerns in Capital Budgeting: Impact on Firms Performance," MPRA Paper 116417, University Library of Munich, Germany, revised 26 Aug 2022.
    4. Naz, Sana, 2008. "Corporate Governance and New Product Offerings at Local Commercial Banks in Pakistan," MPRA Paper 116401, University Library of Munich, Germany, revised 03 Jan 2023.
    5. Haider, Syed Ali Hasnain, 2006. "A Study on the House Financing Facilities by Banks Compared with HBFC," MPRA Paper 116399, University Library of Munich, Germany, revised 06 Dec 2022.
    6. Kausar, Muhammad Naveed, 2006. "An Overview on Auto Leasing Sector of Pakistan and Its Impact on Automobile Industry," MPRA Paper 116442, University Library of Munich, Germany, revised 05 Jul 2021.
    7. Mehdi, Masood, 2021. "Investment Forecasting with Multivariate Linear Regression in the Construction Industry of Pakistan," MPRA Paper 116503, University Library of Munich, Germany, revised 08 May 2022.
    8. Kizilbash, Taban Rukh, 2005. "Increasing Trend of Counterfeiting in Consumers' Products," MPRA Paper 116429, University Library of Munich, Germany, revised 18 Nov 2021.
    9. Ghaffar, Imran, 2006. "Environmental Impact and Mitigating Pollution Cost of Leather Export in Pakistan," MPRA Paper 116446, University Library of Munich, Germany, revised 18 Jan 2023.
    10. Aslam, Muhammad, 2005. "The Role of Small and Medium Enterprises in Supplementing Large Industries in Pakistan with Particular Emphasis on Automobile Industry," MPRA Paper 116434, University Library of Munich, Germany, revised 19 Dec 2021.
    11. Nadeem, Sher, 2005. "Implications of Insider Trading on Share Market in Karachi," MPRA Paper 116447, University Library of Munich, Germany, revised 04 Feb 2023.
    12. Junejo, Arif Iqbal, 2022. "How Do the Owners Hide their Real Profits," MPRA Paper 116477, University Library of Munich, Germany, revised 18 Jan 2023.
    13. Jamali, Nisar Ahmed, 2006. "Upcoming Challenges and Opportunities of Retailing in Pakistan (Supermarket)," MPRA Paper 116452, University Library of Munich, Germany, revised 30 Jan 2023.
    14. Kamali, Abrar Ahmed Khan, 2023. "The Customer Relationship Management Practices in Banking Industry," MPRA Paper 116552, University Library of Munich, Germany.
    15. Bhatti, Nadeem, 2005. "Car Financing, its Significance and Impact on Automobile Industry and Some Trace of Impact on Economy," MPRA Paper 116448, University Library of Munich, Germany, revised 14 Feb 2023.
    16. Ul Haque, Muhammad Ebbad, 2023. "Analysis of Banker's Perception on Islamic Banking In Pakistan," MPRA Paper 116547, University Library of Munich, Germany.
    17. Syed, Humera Hashim, 2022. "Potential Telehealth in Pakistan," MPRA Paper 116478, University Library of Munich, Germany, revised 17 Feb 2023.
    18. Akber, Hira, 2005. "Scope of Hedge Fund in Pakistan," MPRA Paper 116335, University Library of Munich, Germany, revised 12 Dec 2022.
    19. Qureshi, Saad Hassan, 2013. "Consumer Preference of Credit Vs. Debit Card," MPRA Paper 116427, University Library of Munich, Germany, revised 30 Dec 2021.
    20. Chand, Rewa, 2006. "Problems Faced by Financial Institutions and Borrowers in House Financing," MPRA Paper 116445, University Library of Munich, Germany, revised 11 Dec 2022.

    More about this item

    Keywords

    Cash flows; dividends;

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:116415. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.