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Article: Forecasting cash flow from operations: additional evidence.
- Article from:
- Mid-Atlantic Journal of Business
- Article date:
- June 1, 1999
- Author:
CopyrightCOPYRIGHT 1999 Stillman School of Business. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Introduction
Several studies have examined the comparative ability of accrual-based and cash flow-based variables to predict cash flow from operations [Bowen, Burgstahler, & Daley (1986), Murdoch & Krause (1989, 1990), and McBeth (1993)]. The findings of Bowen, Burgstahler, & Daley (1986) and Murdoch & Krause (1989, 1990) support the relative superiority of an accrual-based predictor. But, both studies focused on predicting estimated, not actual, cash flow from operations as reported on the funds statement prior to 1988. Bahnson, Miller, & Budge (1996) report material differences between estimated cash flow from operations and the standardized measure of actual ...