An Empirical Analysis Of Cash Flow Volatility Impact On Enterprise Value

More and more scholars and people from practice circle realized the influence of enterprise's cash flow and its volatility.The drastic fluctuations in cash flow enhance the uncertainty of the future development and the earnings of enterprises and increase the operational risks of the enterprises,which will further influence the investments and financing activities of enterprises.In theoretical circle,enterprise's cash flow volatility was included in the scope of evaluating enterprise value.In this dissertation,both theoretical and empirical analyses are adopted to analyze the influence of cash flow volatility on enterprise value.Moreover,the detailed influence paths are explored to enrich and perfect the enterprise value evaluating system.Firstly,the research background and significance as well as objective are introduced in this dissertation.Next,relative theories and latest researches on cash flow volatility and enterprise value are introduced.Moreover,relative literatures are summarized.Secondly,research hypotheses,selection of data and variables as well as relative models are introduced in this dissertation,on which,the features of cash flow volatility in time and industry are analyzed.Last,panel model is used to analyze the influence of the volatilities in operation net cash flow,net cash flow and free cash flow on enterprise value.Further,the detailed ways how cash flow volatility makes influence on enterprise value are analyzed and researched.According to the research results,operation net cash flow,net cash flow and enterprise's free cash flow can all make significant negative influences on enterprise value.Through cost of equity capital,asset-liability ratio,return on assets,cash flow volatility can make influence on enterprise value.Based on the empirical research results,advices and ideas are put forward for enterprise operators,investors and asset evaluation agencies in this dissertation.