IDEAS home Printed from https://ideas.repec.org/a/bla/jbfnac/v27y2000i1-2p215-245.html
   My bibliography  Save this article

The Predictive Ability of Direct Method Cash Flow Information

Author

Listed:
  • Gopal V. Krishnan
  • James A. Largay III

Abstract

This research examines the predictive ability of direct method cash flow information for firms that use the direct method in their cash flow statements. We use cross sectional and pooled time series regressions to predict operating cash flow data and assess relative predictive ability. Principal findings are: (1) past period direct method cash flow data predict future operating cash flow better than indirect method cash flow data; (2) past period direct method gross operating cash flows predict future net operating cash flow better than past period net operating cash flow; (3) measurement error exists in estimates of direct method operating cash flows from other financial statement data; (4) past operating cash flows predict future operating cash flows better than earnings and accruals.

Suggested Citation

  • Gopal V. Krishnan & James A. Largay III, 2000. "The Predictive Ability of Direct Method Cash Flow Information," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 27(1‐2), pages 215-245, January.
    • Handle: RePEc:bla:jbfnac:v:27:y:2000:i:1-2:p:215-245
    DOI: 10.1111/1468-5957.00311
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1468-5957.00311
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1468-5957.00311?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jbfnac:v:27:y:2000:i:1-2:p:215-245. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0306-686X .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.