engleski

Cash flow impact on business results

We often meet the question what is more important indicator for the company business, the cash flow or the business result. It is very difficult to define what is more important because the both are essential and crucial parameters of business so we need to keep track of both. Each company have tendency to generate the positive business results and operate with the positive cash flow. Also the often question is how they are related. Understanding how cash flow relates to business results and how business results relate to cash flow is very important and crucial for success and prosperity of business. A positive business result does not have to mean positive cash flow and vice versa. The aim of this paper is to make analysis between cash flow and business results. The research objective was to explore the correlation between cash flow and business results using the data of net cash flow and business results from the financial statements. The research was conducted on the 20 companies from the Croatian capital market by using static panel data analysis for the period from 2014 to 2017. The research result shows that cash flow impact the business results and that positive cash flow resulting with higher business results. So this paper implied the important but not statistically significant role of cash flow in the determination of business results.

cash flow, profitability, analysis

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