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The impact of free cash flow on firm’s performance: evidence from Malaysia

The objective of this chapter is to investigate the impact of free cash flow (FCF) on a firm’s performance. This research is using the data from 2013 to 2017 from Malaysia and various industries as the moderating variable. Whereas, firm performance is measured by operating performance, firm value, a...

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Main Authors: Kok, Elaine Suit Lai, Abdul Latiff, Ahmed Razman, Ooi, Chee Keong, Tong, Chue Qun
Format: Article
Published: Springer Cham 2020
Online Access:http://psasir.upm.edu.my/id/eprint/111632/
https://link.springer.com/chapter/10.1007/978-3-030-53536-0_1
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spelling my.upm.eprints.1116322024-07-19T02:16:48Z http://psasir.upm.edu.my/id/eprint/111632/ The impact of free cash flow on firm’s performance: evidence from Malaysia Kok, Elaine Suit Lai Abdul Latiff, Ahmed Razman Ooi, Chee Keong Tong, Chue Qun The objective of this chapter is to investigate the impact of free cash flow (FCF) on a firm’s performance. This research is using the data from 2013 to 2017 from Malaysia and various industries as the moderating variable. Whereas, firm performance is measured by operating performance, firm value, and stock return as the dependent variables. All the explanatory variables are tested as whether they have any significant relationship on the firm’s performance as the dependent variables. The firm performance is measured by the company’s accounting performance, which measured by return on asset (ROA) and return on equity (ROE), firm value is measured by Tobin’s Q and the stock return measure by stock price. The data collected are categorized into five different industries, which include finance, plantation, industrial products, properties, and consumer goods. This chapter utilizes panel data regression for testing the hypothesis and the results indicated that some do not support the hypothesis. The findings point out that FCF as the independent variables has a significantly negative relationship with the firm’s performance, measured by ROA and Tobin Q. Besides that, there is a positively insignificant relationship between ROE and stock return on FCF. Springer Cham 2020 Article PeerReviewed Kok, Elaine Suit Lai and Abdul Latiff, Ahmed Razman and Ooi, Chee Keong and Tong, Chue Qun (2020) The impact of free cash flow on firm’s performance: evidence from Malaysia. Eurasian Economic Perspectives. pp. 3-16. ISSN 2364-5067 https://link.springer.com/chapter/10.1007/978-3-030-53536-0_1
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
description The objective of this chapter is to investigate the impact of free cash flow (FCF) on a firm’s performance. This research is using the data from 2013 to 2017 from Malaysia and various industries as the moderating variable. Whereas, firm performance is measured by operating performance, firm value, and stock return as the dependent variables. All the explanatory variables are tested as whether they have any significant relationship on the firm’s performance as the dependent variables. The firm performance is measured by the company’s accounting performance, which measured by return on asset (ROA) and return on equity (ROE), firm value is measured by Tobin’s Q and the stock return measure by stock price. The data collected are categorized into five different industries, which include finance, plantation, industrial products, properties, and consumer goods. This chapter utilizes panel data regression for testing the hypothesis and the results indicated that some do not support the hypothesis. The findings point out that FCF as the independent variables has a significantly negative relationship with the firm’s performance, measured by ROA and Tobin Q. Besides that, there is a positively insignificant relationship between ROE and stock return on FCF.
format Article
author Kok, Elaine Suit Lai
Abdul Latiff, Ahmed Razman
Ooi, Chee Keong
Tong, Chue Qun
spellingShingle Kok, Elaine Suit Lai
Abdul Latiff, Ahmed Razman
Ooi, Chee Keong
Tong, Chue Qun
The impact of free cash flow on firm’s performance: evidence from Malaysia
author_facet Kok, Elaine Suit Lai
Abdul Latiff, Ahmed Razman
Ooi, Chee Keong
Tong, Chue Qun
author_sort Kok, Elaine Suit Lai
title The impact of free cash flow on firm’s performance: evidence from Malaysia
title_short The impact of free cash flow on firm’s performance: evidence from Malaysia
title_full The impact of free cash flow on firm’s performance: evidence from Malaysia
title_fullStr The impact of free cash flow on firm’s performance: evidence from Malaysia
title_full_unstemmed The impact of free cash flow on firm’s performance: evidence from Malaysia
title_sort impact of free cash flow on firm’s performance: evidence from malaysia
publisher Springer Cham
publishDate 2020
url http://psasir.upm.edu.my/id/eprint/111632/
https://link.springer.com/chapter/10.1007/978-3-030-53536-0_1
_version_ 1805889940144259072
score 13.211869

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