Open AccessThe Effect of Accrual Quality and Operating Cash Flows on Future Cash Flows in the Basic Industry and Chemical Sectors
Author(s) -
Amanda Shofia,
Wiwik Utami
Publication year - 2021
Publication title -
asian journal of advanced research and reports
Language(s) - English
Resource type - Journals
ISSN - 2582-3248
DOI - 10.9734/ajarr/2021/v15i330380
Subject(s) - operating cash flow , accrual , cash flow , cash flow forecasting , cash flow statement , business , stock exchange , cash management , working capital , free cash flow , population , nonprobability sampling , cash on cash return , finance , accounting , cash and cash equivalents , earnings , demography , sociology
This study aims to analyze the effect of accrual quality and operating cash flow on future cash flows. Accrual quality in this study is measured by the accruals-working capital approach, referring to Dechow and Dichev [1] and Francis et al. [2], cash flow is measured by the ratio of operating cash flows to assets. The population of this research is the Basic Industry and Chemical sector companies listed on the Indonesia Stock Exchange for the period 2014-2018. The samples were determined using purposive sampling which resulted in 144 firms year came from 32 companies. The results of this study showed that there is a significant positive effect the accrual quality and operating cash flow on future cash flows. Management should manage the company's operating cash flow efficiently, and simultaneously improve the quality of the company's accruals which will be a positive signal for investors creditors.