scholarly journals IMPLEMENTATION OF CASH FLOW AS A MEASURING TOOL IN PREDICTING FUTURE NET INCOME

2021 ◽  
Vol 1 (1) ◽  
pp. 16-24
Author(s):  
Nurhana Dhea Parlina ◽  
Erwin Budianto
Keyword(s):  
Cash Flow ◽  
Large Scale ◽  
Total Sample ◽  
Cash Flows ◽  
Present Moment ◽  
Net Income ◽  
Future Earnings ◽  
The Future ◽  
Operational Activities

In Indonesia, MSMEs are protected and have a legal shield such as the Presidential Decree No. 19 of 1998 and several other regulations. Where at this time, many MSME businesses are starting to grow both on a household and large scale, this includes Culinary Business. Culinary businesses are one of the many MSME that are starting to flourish, both on a domestic and big scale, at present moment. This business is in high demand among teenagers and adults. With a limited budget, this business may be launched at home, and it has a potential future. Therefore, the background behind the realization of Kedai Nyobian 8 which is used as a case study of problems that occur in the operational activities of Kedai Nyobian 8. The purpose of this study is to analyze net income in predicting operating cash flows in the future. The research method used is quantitative method. The population in this study is a case study at Kedai Nyobian 8 with a number of samples in the form of financial statements for September for 30 days. While October for 26 days, hence the total sample is 56 observations. The sampling measurement technique is a case study at Kedai Nyobian 8 using Saturated Sample. Therefore, Kedai Nyobian 8 will be more effective and achieve better results in the future by reducing unnecessary costs and anticipating future earnings in cash flow.    

scholarly journals KEMAMPUAN LABA UNTUK MEMBERIKAN INFORMASI LABA PERIODE MENDATANG DAN ARUS KAS OPERASI PERIODE MENDATANG SELAMA PERIODE KONVERGENSI IFRS DI INDONESIA

CALYPTRA ◽  
2017 ◽  
Vol 5 (2) ◽  
pp. 196
Author(s):  
Sheila Irawan ◽  
Yie Ke Feliana
Keyword(s):  
Cash Flow ◽  
Stock Exchange ◽  
Cash Flows ◽  
Net Income ◽  
Full Disclosure ◽  
Future Earnings ◽  
Future Cash Flow ◽  
Business Entities ◽  
The Impact ◽  
Future Cash Flows

Abstrak - Penelitian ini bertujuan untuk melihat dampak adopsi IFRS secara bertahap khususnya dalam kemampuan earnings periode ini untuk memberikan informasi future earnings dan future cash flows from operations selama periode konvergensi IFRS di Indonesia dengan membandingkan kemampuan earnings untuk memprediksi future earnings dan future cash flows from operations tiap periode. Penelitian ini menggunakan pendekatan secara kuantitatif dengan badan usaha yang terdaftar di BEI selama periode 2010-2013 sebagai objek penelitian. Jumlah sampel yang digunakan pada penelitian ini adalah 420 badan usaha. Temuan penelitian menunjukkan bahwa tidak ada peningkatan hubungan antara earnings periode berjalan dengan future earnings, namun ada peningkatan hubungan antara earnings periode berjalan dengan future cash flows from operations. Hal ini terjadi karena adopsi IFRS menuntut perusahaan untuk lebih transparan dengan adanya full disclosure, sehingga net income kurang dapat dimanipulasi mengakibatkan earnings yang terjadi periode ini belum tentu berulang di periode selanjutnya yang menyebabkan menurunnya kemampuan untuk memprediksi future earnings, namun meningkatkan kemampuan untuk memprediksi future cash flows from operations karena laba yang terjadi periode tersebut berhubungan erat dengan arus kas dari aktivitas operasional di periode selanjutnya. Kata kunci : Current Earnings, Future Earnings, dan Future Cash Flows from Operations  Abstract – This study aims to look at the impact of the adoption of IFRS gradually, especially the ability of current earnings to provide information about future earnings and future cash flows from operations during the period IFRS convergence in Indonesia by comparing the ability of earnings to predict future earnings and future cash flows from operations of each period. This study uses a quantitative approach to all of the business entity listed on the Stock Exchange during the period 2010-2013 as the research object. The samples used in this study were 420 business entities. The study's findings that there is no increasing relationship between the current earnings and future earnings, but there is an increasing relationship between current earnings and future cash flows from operations. This happens because of the adoption of IFRS requires companies to be more transparent with their full disclosure, so net income is less manipulated, it makes earnings that occurred this period may not be repeated in the next period which led to a decreased ability to predict future earnings, but improving the ability of current earanings to predict future cash flows from operations because current earnings are more closely related to future cash flow from operating activities. Keywords : Current Earnings, Future Earnings, and Future Cash Flows from Operations

scholarly journals Kemampuan Laba dan Arus Kas Operasi dalam Memprediksi Laba dan Arus Kas Masa Depan

2018 ◽  
pp. 80
Author(s):  
Frans AP Dromexs Lumbantoruan ◽  
I Gusti Ngurah Agung Suaryana
Keyword(s):  
Cash Flow ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Flow Property ◽  
Multiple Linear Regression Analysis ◽  
Cash Flows ◽  
Future Earnings ◽  
Analysis Technique ◽  
Operating Cash Flow ◽  
Future Cash Flows

This study aims to determine the ability of earnings and operating cash flows in predicting earnings and future cash flows. This research was conducted on property and real estate companies listed on the Indonesia Stock Exchange. The samples used by 20 companies with 40 observations. The sampling was done by nonprobability samplingmethod with purposive samplingtechnique. The analysis technique used is multiple linear regression analysis. Based on the result of the analysis, earnings influences in predicting future earnings. Likewise, earnings and operating cash flow have an effect in predicting future cash flows. However, operating cash flow is not influential in predicting future earnings. Keywords: profitability, cash flow, property

scholarly journals The Influence of Future Cash Flow Predictions on Profits in Companies Listed on the Indonesia Stock Exchange

2021 ◽  
pp. 026-033
Author(s):  
Titik Purwanti
Keyword(s):  
Cash Flow ◽  
Stock Exchange ◽  
Cash Flows ◽  
Net Income ◽  
Purposive Sampling ◽  
Future Cash Flow ◽  
Operating Profit ◽  
Food And Beverage ◽  
Future Cash Flows

This research was conducted to determine the effect of future cash flow predictions on profits (gross profit, operating profit, and net income) in food and beverage companies listed on the Indonesia Stock Exchange. The method used in this research used purposive sampling with a population of food and beverage companies listed on the Indonesia Stock Exchange for the period 2016-2018. The samples in this research were 19 companies. The results obtained indicate that the operating profit variable has a partial effect on future cash flows, while the net income variable and the gross profit variable do not partially affect future cash flows. Simultaneously, gross profit, operating profit and net income have an effect on future cash flows.

Usefulness of Accounting Estimates

2016 ◽  
Vol 32 (1) ◽  
pp. 123-135 ◽  
Author(s):  
Li Li Eng ◽  
Thanyaluk Vichitsarawong
Keyword(s):  
Cash Flow ◽  
Exploratory Study ◽  
Abnormal Returns ◽  
Cash Flows ◽  
Recent Period ◽  
Future Earnings ◽  
China And India ◽  
Accounting Estimates ◽  
Out Of Sample ◽  
Over Time

This is an exploratory study to examine the quality or usefulness of accounting estimates of companies in China and India over time. Specifically, we examine how well the accounting estimates are able to predict future earnings and cash flows during the period 2003-2013. The results for India indicate that the out-of-sample earnings and cash flow predictions derived are more accurate and more efficient in the more recent period (2010-2013) than the earlier period (2003-2006). In contrast, the out-of-sample earnings and cash flow predictions for China are generally more biased, less accurate, and less efficient. The results indicate abnormal returns earned on hedge portfolios formed on earnings (cash flow) predictions for India in the recent period. In contrast, none of the portfolios for China earn positive returns. The results suggest that the accounting estimates in India in recent years have become better predictors of future earnings and cash flow than accounting estimates in the earlier period. However, the accounting estimates in China are not relevant for predicting earnings and cash flows over the years in the sample period.

Arborista, Inc.: An Instructional Resource Case

2013 ◽  
Vol 28 (3) ◽  
pp. 681-690 ◽  
Author(s):  
Marc P. Picconi ◽  
Kimberly J. Smith ◽  
Alexander Woods
Keyword(s):  
Cash Flow ◽  
Direct Method ◽  
Cash Flows ◽  
Integrated System ◽  
Net Income ◽  
Managerial Accounting ◽  
Early Integration ◽  
Operating Cash Flows ◽  
Cash Flow Statement ◽  
Statement Of Cash Flows

ABSTRACT: This deceptively simple case is intended for use as early as the first day of an M.B.A. core accounting course or as a focused review for an undergraduate accounting course. It achieves three primary objectives: accelerating student learning about the statement of cash flows, emphasizing the importance of both the cash flow statement and the income statement in valuation and capital markets, and introducing the three primary financial statements as an integrated system. The case also features the use of the direct method of presenting operating cash flows, both as a pedagogical tool and to allow interested instructors to increase their focus on that method. We have found that students benefit from the early integration of the cash flow statement, as well as the ability to clearly understand how operating cash flows are similar to—and different from—net income. Finally, the case provides an optional managerial accounting module for instructors who teach a course that integrates financial and managerial accounting.

scholarly journals Net Operating Working Capital, Capital Budgeting, And Cash Budgets: A Teaching Example

2016 ◽  
Vol 9 (1) ◽  
pp. 31-38 ◽  
Author(s):  
James A. Turner
Keyword(s):  
Student Satisfaction ◽  
Cash Flow ◽  
Capital Budgeting ◽  
Cash Flows ◽  
Net Income ◽  
Working Capital ◽  
Accrual Accounting ◽  
Operating Cash Flows ◽  
Present Information ◽  
Budgeting Process

Many introductory finance texts present information on the capital budgeting process, including estimation of project cash flows.  Typically, estimation of project cash flows begins with a calculation of net income.  Getting from net income to cash flows requires accounting for non-cash items such as depreciation.  Also important is the effect of changes in net operating working capital on cash flow.  While students readily understand how to account for depreciation when calculating cash flow, they typically have much more difficulty understanding how and why changes in working capital affect cash flows.  This paper develops a teaching example to show exactly how and why changes in net operating working capital affect cash flows.  The example shows how to derive operating cash flows for a proposed project using the accrual accounting method and then shows a cash budget for the same project.  Finally, the example shows that the discrepancy between the cash flows shown in the cash budget and the operating cash flows can be resolved by accounting for changes in working capital.  A survey of students in an MBA managerial finance course indicates student satisfaction with the teaching example and gives evidence that students prefer the teaching example to explanations of the effect of working capital on project cash flows given in the assigned text.

scholarly journals Cash flow planning at the enterprise

2021 ◽  
Vol 2021 (2) ◽  
pp. 21-28
Author(s):  
Oleh Dorosh ◽  
◽  
Iryna Plish ◽  
Keyword(s):  
Cash Flow ◽  
Cash Flows ◽  
Production Costs ◽  
Economic Activities ◽  
Internal Factors ◽  
Financial Investment ◽  
Financial Condition ◽  
Business Entities ◽  
Operational Activities ◽  
Definition Of

Ensuring the efficiency of production and economic activities of the enterprise requires a constant turnover of funds and effective cash flow planning. The most important component that ensures the continuous operation of the company is cash receipts and expenditures, which show the current financial condition of enterprise, are used to cover production costs, as well as ensure the solvency of the enterprise and the ability to avoid financial debts to banks, government and other business entities. Cash flow planning for domestic enterprises is particularly acute. This manifested itself in the crisis created by the Kovid-19 pandemic. The presence of a financial cushion saved a number of companies from bankruptcy, however, the consequences of an unfinished pandemic are ahead. Therefore, given the above, the relevance of cash flow planning and the formation of basic concepts on this topic is undeniable. The task of the article is to identify the features of cash flow planning of the enterprise and build a clear sequence of this process. The article analyzes the definition of "cash flow", "cash flow planning" and provides a generalized definition of these concepts. The key types of cash flows that are present in the enterprise are given. The main external and internal factors that affect the cash flow of the enterprise are presented. The process of cash flow planning is carefully researched and the sequence of cash flow planning by types of production and economic activity is developed with clear detailing of each stage, where sources of income for enterprises from financial, investment and operational activities, expenses for the same activities and opportunities for optimization are sought. increase revenue and minimize costs. The article proposes the use of such cash flow planning tools as payment calendar, schedule, planned cash flow budget. So, the formation and planning of cash flows in enterprises in today's conditions is a necessary and important process. The success of the company's operation in domestic and foreign markets depends on the rationality of planning and use of funds in enterprises.

Do PCAOB Inspections Improve Working Capital Accrual Reliability? Evidence from the PCAOB Annual versus Triennial Inspection Exposure

2020 ◽  
Vol 34 (2) ◽  
pp. 147-166 ◽  
Author(s):  
Cheol Lee ◽  
Jong Eun Lee ◽  
Myung Seok Park
Keyword(s):  
Cash Flow ◽  
Cash Flows ◽  
Data Availability ◽  
Earnings Persistence ◽  
Working Capital ◽  
Improve Working ◽  
Future Earnings ◽  
Public Company ◽  
Jel Classifications ◽  
Better Than

SYNOPSIS In this study, we examine whether the ability of working capital (WC) accruals to predict future earnings and cash flows differs between registrants whose auditors are subject to annual Public Company Accounting Oversight Board (PCAOB) inspections and those whose auditors are subject to triennial PCAOB inspections. We find that WC accruals of clients audited by auditors subject to annual PCAOB inspections enhance earnings persistence more and map into future cash flow realizations better than those audited by auditors subject to triennial PCAOB inspections. These findings are stronger for operating asset accruals than for operating liability accruals. Furthermore, after PCAOB inspection reports are released, improvements in WC accrual reliability are more evident for clients audited by annually inspected auditors than for clients audited by triennially inspected auditors. Overall, our findings suggest that more frequent PCAOB inspections help to improve WC accrual reliability. JEL Classifications: M41; M42; M48. Data Availability: The data are publicly available from the sources identified in the paper.

How Low Can We Go? Proposing Quantifying the Going Concern Survival Index (GCSI) and One Month Resilience Index (OMRI) as Metrics of Firm Risk in the Wake of the Coronavirus Crisis

2020 ◽  
Author(s):  
Glen L. Gray ◽  
Michael Alles
Keyword(s):  
Process Mining ◽  
Design Science ◽  
Science Research ◽  
Cash Flows ◽  
Net Income ◽  
Firm Risk ◽  
Going Concern ◽  
The Future ◽  
Going Concern Opinion ◽  
Resilience Index

The coronavirus crisis disrupted business survivability.  Measures, like going concern opinion and bankruptcy predictors, depend on past trends extending into the future. With black swan events, past trends do not extend into the future. We propose two new metrics.  The “Going Concern Survivability Index” ( GCSI) is the maximum percentage revenue loss that a business can endure as a going concern. The “One Month Resilience Index” (OMRI) is the effect on the net income from the loss of the revenue its most successful month. While OMRI is straightforward, calculating GCSI requires real options and process mining. The emerging technology of process mining and artificial intelligence are needed to capture the dynamic process by which management will juggle cash flows, sources of funds, and payment of liabilities as revenue falls. This paper is an instance of action design science research and we discuss the steps to put our artifact into practice.

scholarly journals Rainwater harvesting for restoring degraded dry agro-pastoral ecosystems: a conceptual review of opportunities and constraints in a changing climate

2017 ◽  
Vol 25 (2) ◽  
pp. 135-149 ◽  
Author(s):  
Theib Y. Oweis
Keyword(s):  
Large Scale ◽  
Rainwater Harvesting ◽  
Vegetation Growth ◽  
Changing Climate ◽  
System Equilibrium ◽  
The Future ◽  
System Restoration ◽  
Water Scarce ◽  
Pastoral Ecosystems

Water resources in dry environments are becoming scarcer, especially under the changing climate. In response, rainwater harvesting (RWH) is being reemphasized with calls to revive the practice. Ancient knowledge on RWH — mainly the collection through runoff, storage, and use of rainwater for various purposes — is still relevant, especially for dry environments. However, many old practices and technologies may not be suitable or feasible for the present and future. Little has been done to modernize and (or) develop new practices and technologies based on ancient indigenous knowledge. Modernizing old practices or developing new ones and using them in integrated rangelands restoration packages with enabling policy environment can unlock their potential in many water-scarce regions of the world. This paper reviews the state-of-the-art of micro-catchment rainwater harvesting (MIRWH) in dry environments and discusses the opportunities available and the major obstacles faced in using it to restore degraded agro-pastoral ecosystems and support their sustainability. The review highlights the knowledge behind it, the practices developed over the years, and their relevance to today and the future. The paper indicates areas of modernization that can make it more feasible for the future of the dry environments, especially their role in mitigating and adapting to climate change. Conventional and passive approaches to restoring/rehabilitating degraded dry agro-pastoral ecosystems are either too slow to show an obvious impact or not progressing satisfactorily. One main reason is that, because of land degradation, the majority of rain falling on such ecosystems and needed for revegetation is lost with little benefit being gained. Adopting a more progressive intervention to alter the processes of degradation and move towards new system equilibrium is required. MIRWH can enable a large portion of this otherwise lost rainwater to be stored in the soil, and, if used in an integrated packages including suitable plant species and sound grazing management, it may support meaningful vegetation growth and help system restoration. The Badia Benchmark project, implemented by ICARDA in Jordan and Syria, has demonstrated the potential for adoption at large scale in similar environments. This case study illustrates the potential and the constraints of this practice.

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