A comparative study of forecasting managerial profits according to the relationship between risk-taking and the future value of the company in the automotive, cement and basic metal industries

The primary objective of the present research is to conduct A comparative study of forecasting managerial profits according to the relationship between risk-taking and the future value of the company in the automotive, cement and basic metal industries listed on the Tehran Stock Exchange. To achieve this, a systematic elimination sampling method was used to select 44 companies from these three industries for a 6-year research period. In this study, the relationship between risk-taking and future value of the company was initially examined and compared. Subsequently, by assessing the level of predictive managerial profits in the sampled companies, their association with risk-taking and future value of the company in the aforementioned industries was tested. The statistical method used for hypothesis testing in this research is multiple regression through Ordinary Least Squares (OLS) and Generalized Least Squares (EGLS) methods. Preliminary findings of the research indicate that an increase in risk-taking leads to an enhancement of future value of the company in all three industries. However, the results of the first hypothesis test suggest that there is no significant relationship between high levels of predictive managerial profits and company risk-taking in all three industries. On the other hand, the results of the second hypothesis test reveal that in companies with high levels of predictive managerial profits in the automotive and cement industries, the relationship between company risk-taking and future value of the company has a weaker positive correlation with predictive managerial profits. Nonetheless, such a relationship is absent in the basic metals industry.