SIGNALLING THEORY STUDY: PREDICT FUTURE CASH FLOWS WITH EARNINGS AND CASHFLOWS IN CONSUMER GOODS INDUSTRIES BEFORE PANDEMIC ERA

  • Uswatun Khasanah Accounting, STIE NU Trate Gresik, Indonesia
  • Nur Samsi Accounting, STIE NU Trate Gresik, Indonesia
  • Choiri Choiri Accounting, STIE NU Trate Gresik, Indonesia
  • Zainab Zainab Accounting, STIE NU Trate Gresik, Indonesia
DOI: https://doi.org/10.30996/die.v13i2.7298
Keywords: Cash Flow, Profit, Predictability

Abstract

This study aims to determine which of the cash flows and earnings have a better ability to predict future cash flows in the two years after the study period. This research was conducted on consumer goods industries listed on the Indonesia Stock Stock Trade in 2016 – 2019 employing a purposive examining procedure. (Dechow, Kothari, & Watts, 1997) found that earnings have a better ability to predict future cash flows than operating cash flows themselves. Another study conducted by (Dahler & febrianto, 2007) utilizing numerous straight relapse models found that operating cash streams for the current year have a better ability than profit in anticipating future working cash streams for both bunches of companies that have positive and negative benefits. Utilizing the same model, this study concludes that earnings have a better ability to predict future cash flows than cash flows themselves. However, cash flows still have a significant ability to predict future cash flows. In expansion, this consider too succeeded in demonstrating that profit has an incremental capacity to anticipate future cash streams.

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Published
2022-09-26
Issue
Vol 13 No 2 (2022): SEPTEMBER
Section
Articles
Copyright (c) 2022 Uswatun Khasanah, Nur Samsi, Choiri Choiri, Zainab Zainab

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