The Relation between Financial Flexibility and Performance of Iranian Investment Firms from the Market Point of View

Strategic and undeniable role of the financial flexibility in a firm could be studied from different points of view. This study examines the impact of financial flexibility on performance of the investment firms in Tehran Stock Exchange. The sample consists of 150 firms listed in TSE from 2008 to 2012. Financial flexibility as the independent variable and performance of investment firms as the dependent variable are measured by cash flow yield ratio and Sharp & Trainer Criteria respectively. Inflation, firm size and profitability variables are considered as control variables. To analyze the data, multiple regression (Panel Data Method) is used. The results indicate a significant positive relation between free cash flow yield (FCFY) and Sharp Criteria, and no significant relation between free cash flow yield (FCFY) and Trainer Criteria.