Investigate the Relationship between Stock Returns and Operating Cash Flow and Accounting Net Income in Firms Listed in Tehran Stock Exchange

This study examines the relationship between changes in stock returns and changes in operating cash flows and changes in accounting net profit of listed firms in Tehran Stock Exchange. In this study statistical society included all listed firms in Tehran Stock Exchange that 63 firms were selected as sample through sample size determination test (Cochran). In this regard, three hypotheses were developed. In order to test these hypotheses the information of firms listed in Tehran Stock Exchange during the period of 2006–2011 were collected. Also information about the firms was analyzed each year using EXCEL and SPSS software. To test the hypotheses, simple linear regression is used and correlation coefficient between the variables is used to test the statistical significance of variables using ƒ and t-statistic is used to determine regression equation coefficients significance. The results of hypotheses tests show that there is a significant relationship between changes in stock returns and changes in accounting net profit also, there is a significant relationship between changes in stock returns and changes in operating cash flows, however, the third hypothesis in this study is rejected. In other words, the correlation between changes in stock returns and changes in accounting, net profit is less than changes in stock returns with changes in operating cash flows.