The main purpose of this research is to investigate the relationship between working capital, operating cash flow and operating income, in the companies that listed in Tehran Stock Exchange. Panel analysis is applied to sample of 52 companies during the period 2000-2009. The results show that...

By excluding the change in non-operational working capital in calculating the net working capital for the FCF, analysts create a hypothetical or ‘virtual' cash flow. This may, or may not, be feasible given the firm's business plan, as funds may be earmarked for future capex, or other purposes....

The net income of a company in a given year is an arbitrary number which depends on several decisions on the accounting of expenses and revenues. By contrast, each cash flow (money going out of the cash of the company into someone's pocket: shareholders, debt owners...) is a single number not...