AN INVESTIGATION INTO RELATIONSHIP BETWEEN VARIOUS EARNINGS AND CASH FLOW MEASURES OF FIRM PERFORMANCE WITH STOCK RETURNS IN TEHRAN STOCK EXCHANGE

The main subject studied in this research to determine if earning measures is more meaningfully related to stock return that the cash flow returns? Following earning measures are included in this research: Included earning measures in this research are: 1-earnings before interest and tax (EBIT) 2-net profit after tax (NPAT). Cash flow from operating activities (OPCF), cash flow from investing activities (INVCF) and cash flow from financing activities (FINCF) are taken into account as cash flow measures. In order to test the hypothesis, coefficient of correlation, multi regression and Fischer testing by means of SPSS software have been used.. The statistical analyses showed that there exists a stranger relation between earning variables and stock returns than the cash flow variables and stock returns. The next stage in this research is to investigate liabilities influence for demonstrating relation between performance and stock return. The results indicate that in those companies which their liabilities are increased in a modified manner, the relation between earning measures and stock return will increase more, compared to cash flow measures and stock return.