The Effect of Website Age on Reported Cash Flows

Abstract

Websites are one of the most debated technologies in business. After the dotcom bust, many argue that websites lack value in commercial environments. Cash flow, essential to a business' health, is often a reliable indicator of income opportunities. Yet the link between cash flows and website ownership has never been satisfactorily made. This paper explores the relationship between cash flows, website use and maturity by examining factors such as website age, number of IT employees, total assets and market capitalisation. The study finds that website ownership and maturity do not explain cash flows, except for companies in IT industries. Show more