International Business Management

Year: 2016
Volume: 10
Issue: 25
Page No. 5904 - 5915

The Relationship Between Fixed Assets’ Revaluation and Future Performance of Companies Listed on Tehran Stock Exchange

Authors : Abdolhamid Jamshidian and Abbas Alimoradi sharifabadi

Abstract: The capital increaseseems to beoneof the most importantmanagement decisionswhich may affect the creditors and investors decisions. On the other hand, operating profit and operating cashflows is a critical issue for eachbusiness unit. Investors, creditors and financial analysts try to maximize their wealth through analysis of operating income and operating cashflows data and its impact on future performance. In the present studythe relationship between capital increase and future performanceis investigated. In this regard, for the first time in Iran, it is attempted to distinct between capital increases via fixed assets revaluation and other resources and assesses their differences. Also, the proxy for future performance is considered to be operating profit and operating cash flows. In order totest the hypothesis, multivariate regression models using panel data from a sample of 246 companies listed in Tehran Stock Exchange from 2010-2014 is employed. The results show that there is a significant relationship between the capital increases using both fixed assets revaluation and other resources and companies future performance. Based on these results it might be concluded that capital increase could improve the companies’ future performance, no matter what is the base of that.

How to cite this article:

Abdolhamid Jamshidian and Abbas Alimoradi sharifabadi, 2016. The Relationship Between Fixed Assets’ Revaluation and Future Performance of Companies Listed on Tehran Stock Exchange. International Business Management, 10: 5904-5915.

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