Management of Cash Flow Information for Investment Decisions
Journal Title: Journal of Computing and Management Studies (JCMS) - Year 2019, Vol 3, Issue 2
Abstract
This study is concerned with investigating the significance of information contained in the cash flow statements of Libyan investment companies. A Variety of Libyan investment companies' this study aims to evaluate the extent to which Libyan investment companies rely on the information provided by Cash Flow Statements, and focuses on sector differences. Cash Flow Statements are important sources within financial statements, as suggested by the Financial Accounting Standards Board (FASB 1978). Moreover, cash flows are involved in various economic decision contexts such as liquidity and solvency evaluation and performance evaluation, many studies have investigated the ability of Cash Flow Statement data to predict future cash flows. In addition, most research has been undertaken in the USA and UK. There has been no published research undertaken in Libya. (Aloud 2005). Libyan investment companies have doubts regarding the usefulness of cash flow statements, as there is little evidence on the usefulness of the Cash Flow Statement, in the case of Libya (Aloud 2005). This makes users of financial statements unwilling to use cash flow information in their decisions. Libya is a developing country this current study focuses exclusively on the information provided by Cash Flow Statements in Libyan investment companies, and fills a gap in the literature. The investment in Libya is important to the economy, as it represents a significant revenue base for the future of the country (Otman and Karlberg, 2005). A Variety of Libyan investment companies’ have been investigated Specifically, this study aims to evaluate the extent to which Libyan investment companies rely on the information provided by Cash Flow Statements, and focuses on sector differences. In this study, to test the study aim, a quantitative research method will be employed in form of a questionnaire survey. As explained above, the main aim of the study is to highlight the views and perceptions of officials at the Libyan Investment Companies. For exploratory purposes, in this type of study, empirical work is considered to be important. Therefore, the researcher used the questionnaire survey method as a questionnaire was determined to be the most efficient and economical method of collecting data. The findings revealed that the Libyan investment companies show that the Cash Flow Statement useful in providing information to help decision makers to determine the strategy that the company will adopt in further financing investment activities and an important resource in order to ensure continuity of expansion. They believe that a Cash Flow Statement is important to highlight the liquidity in the company and in turn help to make a particular decision. For example creditors decide to increase or decrease the level of loans to the company according to its liquidity.
Authors and Affiliations
Mohamed Ahmed Matook
Keywords
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