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Paper Information

Journal:   THE IRANIAN ACCOUNTING AND AUDITING REVIEW   Winter 2004 , Volume 10 , Number 34; Page(s) 77 To 110.
 
Paper: 

THE APPLICABILITY OF MULTIVARIATE TIME-SERIES OF MODEL IN PREDICTING OPERATING CASH FLOWS: THEORY VS. EVIDENCE

 
 
Author(s):  MODARES A.*, DIANATI Z.
 
* 
 
Abstract: 
The purpose of this research is finding a model that can help us predict the future cash flows of economic entities in Iran. According to the theoritical literature and prior researches, four models for predicting cash flows that their independent variables are; 1) Historical operating cash flows, 2) Historical accounting earnings, 3) Historical operating cash flows and accounting earnings, and 4) Operating cash flows, accounting earnings, and relevant items of historical current assets and current liabilites are taken into consideration. The predictability and accuracy of these models were tested in 40 firms, 11 groups, and a total of them (52 Samples).
The findings of this research show that; 1) predicting the future operating cash flows by using the historical operating cash flows (model 1) is imposible, 2) predicting the future operating cash flows by using the historical earnings (model 2) is meaningfully possible and the priority of earning to cash flows in predicting cash flows is confimed, 3) using historical operating acsh flows and historical earning simoltaneously, (model 3) improved the prediction of model, 4) using historical operating cash flows, historical earnings, relevant items of historical current assets and current liabilities simoltaneously (model 4) improved the prediction of model, and 5) From the point of prediction error percentage reduction, in firm levels, model 4 is a more appropriate models for predicting operating cash flows.
 
Keyword(s): FORECASTING, OPERATING CASH FLOW FORECAST, FORECASTING MODELS, TIME-SERIES MODEL
 
References: 
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