The Relationship between Profitability criteria and Risk With stock price Based on Cash Flow Patterns

The paper is presented one of the company's life cycle phases of separation methods by
Dickinson (2010). In The method for the separation of life cycle of the company is used
established patterns of positive and negative symptoms as Three-ply classes’ cash flow
(operating, investing and financing). Allocating to each phase of enterprise life cycle
cash flow patterns have been made through to the economic theories. The main of this experimental study is evaluating and determining the correlation between the
accounting values and market value of shares of stock companies and attempts to
evaluate correlation between profitability criteria, criterion to assess the risk with stock
price based on cash flow patterns according to previous studies such as Dickinson,
Anthony and Ramesh (1992). Population of investigation is the company listed in the
Tehran Stock Exchange from 1384 to 1391 and were analyzed on basis of both growth
and decline in cash flow patterns. The research is used Correlation strategy, practical
approach. The findings of show that variables of earnings per share, return on assets,
return on equity, sales growth, the ratio of market value to book value of shares and
financial leverage of companies that are in the early phase of their life cycle (growth)
are stronger relationship than companies that are in the end of the life cycle (decline)
with stock prices in the capital market in stock prices that resulting from cash flow
patterns.