Prediction of Operating Cash Flows Using Accounting Information: Korean Evidence

다국어 초록 (Multilingual Abstract)

This study investigated whether current cash flows from operations has superior predictive ability to current earnings in the prediction of future operating cash flows of Korean companies. Using a reduced sample of 240 non-financial companies listed in the Korea Stock Exchange for the period of 2006-2015, the results, based on the OLS regression analysis and panel data analysis, indicated that current cash flows from operations have superior predictive ability to current earnings for future cash flows from operations and operating income (EBIT) has also the same explanatory power as the operating cash flows for the prediction of future operating cash flows. The results of the study supported the idea that cash flows are considered more meaningful barometer than accrual based earnings when investors determine the value of the company and make the decision of their investments. Compared to pooled regression analysis which has been most extensively used in the previous studies, the use of fixed effects with panel data improved the explanatory power of the models.

참고문헌 (Reference)

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