Investigating the Effect of Cash Flow Management on Firm Performance: The Mediating Role of the Business Cycle in Companies Listed in the Tehran Stock Exchange

Abstract

The current aims to investigate the effect of cash flow management on firm performance and the mediating role of the business cycle in companies listed on the Tehran Stock Exchange. The current research is descriptive and applied. According to the spatial and temporal scope, the study's statistical population includes the companies listed on the Tehran Stock Exchange from 2017 to 2022. Thus, the statistical sample based on the screening method in this research is 104 companies. To study the relationship between the variables of this research, cash flow management was considered an independent variable, company performance was considered a dependent variable, and the business cycle was considered a mediating variable. The relationship between each of these indicators was studied. In this way, two hypotheses were developed, and related data were collected. Eviews software was used to analyze data and test hypotheses in this research. The analyses performed on the variables and their indicators showed that the change in the duration of receivables has a negative and significant effect on the company's performance. The change in Inventory Turnover Days (ITD) does not affect the company's performance. Changing the days payable outstanding does not affect the company's performance. A change in the Cash Conversion Cycle (CCC) causes a change in the company's performance. Cash flow management negatively and significantly affects firm performance due to the mediating role of the business cycle (recession period). Cash flow management positively and significantly affects firm performance due to the mediating role of the business cycle (boom period).