The Analysis of Linear& Non-Linear Relationships between Changes in operating cash flows, operating profits, net profits and Stock Return in Companies listed on Tehran Stock Exchange (TSE)

摘要

The present study attempts to investigate the linear and non-linear relationships between accounting variables and stock return in TSE during the years 2007-2011. Studied accounting variables include operating and net profits and cash flows from operating whose relationship with stock return regarding being linear or non-linear has been investigated. In line with the obejectives of the present study, some 77 companies listed on TSE were randomly selected. The findings showed that both linear and non-linear relationships exist between accounting variables and stock return, however, compared to linear relationships, non-linear relationships are more significant. Therefore, it can be concluded that analysts and users of financial information apply other variables to the process of economic decision-making.