Abstract:
The life blood of any entities is cash flow where organizations cannot carry out
further routine activities or investing activities without sufficient stable cash
flow. Because of this, cash flow is of great significance in explaining the finance
related symptoms of the entity such as liquidity, profitability and stability. The
main intention of this study was to examine how far the cash flow impact on
performance of listed Hotel and Travel sector companies in CSE. The research
study has been undertaken with data collected from 30 sample companies
from 290 Hotel and Travel sector listed companies in CSE using Random
Sampling technique and the data is available for 6 years covering from 2013 to
2018. Pooled Ordinary Least Square regression, Fixed Effect and Random
Effect and Variance Inflation test were utilized as statistical techniques to
explore this study. According to the Hausman test, the Fixed Effect was
identified as the best model for examining the impact of cash flow on Return
On Assets and Return On Equity. The findings of the study revealed that
Operating Cash flow and Investing Cash flow positively and significantly impact
on Return on Assets at 95% confidence level. These findings revealed the cost
leadership and differentiate strategy used within the hotel and travel sector.
On the other hand, financing cash flow has negative and insignificant impact
over the Return On Assets which is supported by the agency theory. The value
of R squared looks good which is 40% and the Durbin Watson Stat of 2
symbolizes there is no auto correlation. In addition, the multi collinearity
problem doesn’t exist in the regression model according to the VIF test carried
out
