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Economic Thought and Practice, Vol. 28 No. 2, 2019.

Preliminary communication

MODELLING THE INFLUENCE OF CASH FLOW ON INDEBTEDNESS OF CROATIAN COMPANIES USING LINEAR REGRESSION MODEL

Anita Čeh Časni orcid id orcid.org/0000-0002-2742-8619 ; Ekonomski fakultet Zagreb, Katedra za statistiku
Josipa Filić orcid id orcid.org/0000-0002-0250-4697 ; Ekonomski fakultet Zagreb, Katedra za statistiku

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Abstract

The aim of this paper is to examine the statistical relationship between cash flow and corporate debt using multiple linear regression model. In addition to cash flow, the size of the enterprise was used as an additional explanatory variable in the model. Since there is a great deal of research in the relevant literature on the relationship between profit and debt, this paper uses cash flow instead of profit, which is a contribution to the existing literature. The results of the regression analysis indicate a negative impact of cash flow on indebtedness, which also confirms packing order theory. In addition, the results show a positive (albeit weaker) impact of corporate size on debt.

Keywords

multiple linear regression model; cash flow; indebtedness; firm size

Hrčak ID:

230526

URI

https://hrcak.srce.hr/230526

Publication date:

19.12.2019.

Article data in other languages: croatian

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