Journal of Accounting, Finance & Management Strategy











Volume 13, Number 2, December 2018

The Impact of Changes in the Elements of Cash Flows Statement on Stock Returns in Jordanian Commercial Banks Listed on Amman Stock Exchange: An Empirical Study

Mohyedin Hamza¹*, Muna Mohammad Jaradat²**


This study examines the impact of changes in the elements of cash flows statement on stock returns in Jordanian commercial banks listed on Amman Stock Exchange during the period 2009 – 2015. The population of the study was 13 commercial banks with 91 observations. The dependent variable was Stock Returns while the independent variables were change in combined activities of cash flows, change in operating cash flow, change in investing cash flow, and change in financing cash flow. Also the researcher used control variables which are bank’s size, bank’s performance, and bank’s financial leverage. The secondary data collected from reports and financial statements. Data have been analyzed by using correlation analysis, ordinary least squares (OLS) regressions and analysis of variance (ANOVA) to test hypotheses, and to answer the question of the study and reach their goals. The study results indicate that the change in cash flows from operating activities and change in cash flows from investing activities have a positive significant impact on stock returns. Also, the study shows that the changes in cash flows from financing activities do not have a significant impact on stock returns. Furthermore, the bank’s performance, bank’s size, and financial leverage have a significant impact on stock returns. Based on the results, the researcher recommends that the change in cash flows should be taken into account, and use cash flows statements in the evaluation of the banks.


Keywords: Cash flows statement, Cash flows from operating activities (OCF), Cash flows from investing activities (INVCF), Cash flows from financing activities (FINCF), Stock returns, Earnings per share (EPS), Jordanian commercial banks.

JEL Classification: G1, G21, M40


¹ Associate Professor, Department of Accounting, Faculty of Economics and Administrative Science,
 Zarqa University* E-mail: mohy.hamza@yahoo.com

² Researcher, P.O. Box 3415, Zarqa 13111, Jordan.** E-mail: munajaradatco@hotmail.com