An Analysis of The Difference Ability of Core And Non-Core Cash Flow From Operation In Predicting Future Cash Flows
Abstract
Adjie, Andry Kusuma. An Analysis of the difference ability of core and noncore
cash flows from operations in predicting the future cash flows . International
Program Faculty of Economics. Islamic University of Indonesia. Yogyakarta.2005
This study tries to investigate the ability of current cash flows from operation
to predict the future cash flows and the ability of cash flows component (core and
non-core) to predict the future cash flow in manufacturing companies that arelisted in
Jakarta Stock Exchange from the period of 1995-2002. This study also tries to
investigate the different persistent level between aggregate cash flow from operation
in current year and accruals components to predict the future cash flows, and tries to
prove that cash flow components are incrementally informative beyond accrual
components in predictingthe future cash flow.
This study proposes cash flow prediction models that distinguish cash flow
from operation into core and non-core cash flows based on AICPA's
recommendation, in Indonesia.
The study uses linear regression model with the aggregate future cash flow
from operation as the dependent variable. From this research we can derive the
conclusion that in conformity with AICPA recommendation. This research finds that
aggregate cash flow operations have the ability to predict future cash flows. And by
disaggregating cash flow from operation, we find thatcash flow from operation have
different persistence level in predicting the future cash flow. Disaggregating accruals
in the prediction model and aggregate cash flow from operation on future cash flow
will lead some conclusions that aggregate cash flow are incrementally informative
beyond accruals components in predicting the future cash flow. And by
disaggregating the component of cash flows from operation and accruals components
on future cash flow, it will prove that cash flow component are incrementally
informative beyond accruals component in predicting the future cash flows. All
variables are scaled by total assets.
Collections
- Akuntansi [4399]