Use of cash flow ratios on the impact of profitability (A study on select software industries in Hyderabad)

To evaluate the capital structure from the free cash flow and the financial performance of companies in order to optimise the finance decision for management and investment. The key financial performance indicators of sample companies were correlated to free cash flow. The variables can be positively or negatively correlated to each other. The cash flow and corporate performance though has the impact of financial leverage operating cash flow and company size on dividend policy. The hypothesis has been tested by correlation analysis technique. Free cash flow to equity and the market value is also considered to judge the relationship of FCFE, net income, Net capital expenditure, working capital and Debt position. The free cash flow to equity can affect the market value of the companies. The comparison of profitability and free cash flow of five companies is done. Chi-square technique was also conducted but however the outcomes of the results in both the tests were formulated to be same as the correlation analysis technique is considered for the research work.