Relationship Between Cash Flow and Profitability of Listed in The Stock Exchange of Thailand

Abstract

This study aimed 1) to study the cash flow and profitability listed in the Stock Exchange of Thailand and 2) to find the relationship between cash flow and profitability  listed in the Stock Exchange of Thailand. It selected data from 304 of 486 companies regarding the complete data factors collected from 5 years of financial statement and annual report between 2560 – 2564 (B.E.). Descriptive statistics which were mean, maximum, minimum, and standard deviation, and inferential statistics, which were multiple regression, were used to analyze the relationship between cash flow and profitability at a 0.05 significant level.

The result of the study found that 1) the average free cash flow was 5,568,697.34 Baht and, the standard deviation was 29,331,138.36, the average cash flow operating was 3,085,175.85 Baht. Furthermore, the standard deviation was 18,070,560.30, the average net profit margin was 7.92, and standard deviation was 42.35, the average gross profit margin was 25.85, and average standard deviation was 17.42, the average return on assets was 4.53, and the standard deviation was 7.47, average return on equity was 8.03, and standard deviation was 14.97, respectively. In addition,  2) result from hypothesis testing found average free cash flow and cash flow operating have a relationship with profitability which were gross profit margin, net profit margin, return on assets, and return on equity of listed companies on the Stock Exchange of Thailand. Therefore, the business should consider keeping a small amount of free cash flow and focus on income cash which should be more than expense cash from the operation. As a result,  the process  will have a positive cash flow, affecting the business's profitability and investment decisions from investors.