The prediction of future operating cash flows using accrual-based and cash-based accounting information: Empirical evidence from Vietnam

This research was conducted for assessing the predictive ability of future cash flows from operating activities by using accounting earnings and cash flows information in the past. Data were collected from the firms listed on Ho Chi Minh Stock Exchange (HOSE) from 2009 to 2018, including the sample of 242 non-financial listed companies. Three statistical methods approaches were employed to address econometric issues and to improve the accuracy of the regression coefficients based on Ordinary Least Squares (OLS), Random Effects Model (REM), and Fixed Effects Model (FEM). The findings showed that earnings and cash flows and aggregated accruals had remarkable ability to forecast future cash flows and the model of operating cash flows combined with aggregated accruals had the most effective prediction ability for companies listed on Ho Chi Minh Stock Exchange.

Abstract licence: CC BY

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