An Analysis of Cash Flow and Investments – a Case of Consumer Staples Sector in UAE

Abstract

Cash flow of an organization is one of the most vital indicator of its overall financial strength. A Cash flow statement discloses the net amount of the inflow and outflow of money that is placed in a business, it can be in a form of money or cash-equivalent, and that helps the company to determine future financial decisions such as funding investments from internal or external finance sources. The Manufacturing industry in the United Arab Emirates has been growing enormously in the recent past, it represents almost 80% of the country’s non-oil trades which makes it the next biggest source of funds in the economy after oil industry. This study intends to examine the relationship between cash flow and investments in the consumer staples industry in UAE during 2012 to 2017. Further, the difference in investment levels, if any, between the selected companies will also be analysed. Our results show that cash and size are relevant factors that determine the investment of consumer staple sector in UAE.