Investigating the effect of environmental uncertainty on the relationship between cash value and financial distress of firms listed on the Tehran Stock Exchange

Document Type : Original Article

Authors

1 Department of Accounting, Moghadas Ardabili Institute of Higher Education, Ardabil, Iran

2 Department of Accounting, Ardabil Branch, Islamic Azad University, Ardabil, Iran

Abstract

The main purpose of this research is to investigate the effect of environmental uncertainty on the relationship between the value of cash and the financial distress of companies listed on the Tehran Stock Exchange. The current research is a part of applied research in terms of its purpose. In terms of nature, it is part of review research. In terms of the type of reasoning, it is a part of analogical-inductive research. From the perspective of time, it is part of retrospective research. In terms of the duration of the research, it is part of the combined method. The statistical population of the current research is the companies listed to the Tehran Stock Exchange, after removing the restrictions, 130 companies were selected as a statistical sample. The period under investigation is between 2016 and 2020. With the occurrence of global financial crises in recent years, especially in the last two decades, financial and economic scientists use different methods to study and predict the financial status of economic enterprises. Today, with the globalization of the economy, competition has become one of the main mechanisms of the market. The results of the first hypothesis test of the current research show that there is an inverse and significant relationship between the value of cash and financial distress of companies. In other words, with an increase in the value of cash, financial distress decreases, and on the contrary, with a decrease in the value of cash, financial distress increases. The results of the second hypothesis test also indicate that environmental uncertainty has a significant effect on the relationship between the value of cash and the financial distress of companies.

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References

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New Applied Studies in Management, Economics & Accounting
Volume 5, Issue 4
December 2022
Pages 13-27

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History

  • Receive Date: 20 August 2022
  • Revise Date: 23 September 2022
  • Accept Date: 16 October 2022

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