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A study on profitability of Nordic large cap companies, effects of free cash flow and debt
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Business Administration.
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Business Administration.
2018 (English)Independent thesis Advanced level (degree of Master (Two Years)), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

This paper has studied the relationship between free cash flow & debt with profitability of the Nordic Nasdaq large cap for the period of 2012-1017. Population of the study consists of 223 Nordic companies listed in Nasdaq. From this population a sample of 100 companies from different sectors have been chosen by random sampling, but the sample does not include financial institutions because the way these kinds of institutions are financing differ from companies in other sectors. Data has been collected from Eikon program which provides financial information about the listed companies around the world based on the company's audited financial statements. validity and reliability of the data have been checked to make sure the data are not wrong. In this study, free cash flow, debt to equity ratio & debt ratio are considered as independent variables and profitability of the firm has been considered as dependent variable. In addition, diversity of the companies based on the countries they are established in is considered as dummy variable. Profitability of the firms have been measured by return on asset. The research philosophy is positivism and the research approach is deductive. Based on a quantitative research in which secondary data has been analyzed by running the Pearson correlation analysis and regression analysis. Result of the study revealed that; free cash flow has a positive effect on profitability of the Nordic Nasdaq large cap. In addition, the result of study showed that; debt ratio has negative effect on profitability of the targeted firms. But, the result showed that; the debt to equity ratio does not affect profitability of the firms. The result of running dummy variable revealed that; companies in Finland have 2,3 % lower return on assets compared with the companies located in Denmark. Also, the companies established in Sweden have a 2,3 % lower return on assets compared with Denmark.

Place, publisher, year, edition, pages
2018. , p. 41
Keywords [en]
Free cash flow, Return on assets, Debt to equity ratio, Debt Ratio, Profitability, Nasdaq Nordic Large Cap.
National Category
Business Administration
Identifiers
URN: urn:nbn:se:umu:diva-150154OAI: oai:DiVA.org:umu-150154DiVA, id: diva2:1232556
Educational program
Master's Programme in Finance
Supervisors
Examiners
Available from: 2018-08-10 Created: 2018-07-12 Last updated: 2018-08-10Bibliographically approved

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Magisteruppsats- 2018-Babak-Sebastian(567 kB)182 downloads
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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf