Abstract
This study investigates the impact of cash flows on share price in the oil sector of Pakistan. The variables used in this research are operational cash flows, investment cash flows and financial cash flows as independent variables and share prices as a dependent variable. To test the impact of cash flows on share prices, simple regression analysis is used. The data of 5 largest listed oil companies for 14 years has taken into consideration which has collected from various government agencies such as the stat bank of Pakistan, Federal Bureau of statistics, and securities and Exchange Commission of Pakistan. The study found significant relationship between cash flows and share prices in five largest oil companies listed in Pakistan Stock Exchanges(PSX).
Keywords: Prices, Operational Cash Flows.
Introduction
The financial information is usually derived from various financial statements like profit and loss account, balance sheet, and cash flows statement. Based on the information, stakeholders make decisions that reflect the movement of stock. When an investor invests in the company it's his/her right to know how the investment is being utilized( Girish and Desai, 2017). Despite a number of studies on the topic under consideration, the cash flow and share price still have research gap which needs further elaboration. The cash has a major role while defining the need for cash availability while distributing dividend to shareholders. The impact on share price is a technique that get the attention and concentrations of shareholders. Cash flows are usually in three different forms. operating, investing and financing.