2018

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THE MODERATING EFFECT OF OWNERSHIP STRUCTURE ON THE RELATIONSHIP BETWEEN FREE CASH FLOW AND ASSET UTILIZATION
(UMT.Lahore, 2018) Ikrama Tahir
The main purpose of this study is to determine the relationship between FCF and asset utilization and to figure out the moderating impact of different ownership structures on the relationship between these variables. Three types of ownership structure employed namely government ownership, managerial ownership and foreign ownership. The data is cross sectional in nature over the period 2012-2016. The data has been taken from the financial reports of selected PSX-100 index listed firms. Descriptive analysis, correlation analysis and hierarchical regression analysis is used in order to achieve the research objectives of the study. The findings of the research study revealed that there exists an insignificant but negative association between the asset utilization and free cash flows. The research study further specifies that the free cash flows may be spent fruitlessly which may leads to the inefficient utilization of assets,The study also found that managerial and foreign ownership structure are a better tools to check and monitor the asset utilization in such companies that have higher percentage of free cash flows comparatively to companies with lower percentage of free cash flows. The study has contributed about the understanding of the different types of ownership structures in overseeing the usage of firm’s assets.