An investigation on how to estimate future cash flows: Evidence from Tehran Stock Exchange
This paper presents an empirical investigation to predict future cash flows using present cash flow and accruals using the information of 96 selected firms listed on Tehran Stock Exchange over the period 2007-2011. The proposed study uses linear regression techniques to forecast future cash flow and...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Growing Science
2014-03-01
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| Series: | Management Science Letters |
| Subjects: | |
| Online Access: | http://www.growingscience.com/msl/Vol4/msl_2014_17.pdf |
| Summary: | This paper presents an empirical investigation to predict future cash flows using present cash flow and accruals using the information of 96 selected firms listed on Tehran Stock Exchange over the period 2007-2011. The proposed study uses linear regression techniques to forecast future cash flow and the results indicate that cash flow and accruals together could provide more power to forecast cash flow. In addition, accrual provides future cash flow better than cash flow. The survey also performs an investigation on discretionary accrual and finds that the firms with higher accruals maintain lower return compared with firms with lower return. This means there is a clear evidence of discretionary accruals on Tehran Stock Exchange. |
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| ISSN: | 1923-2934 1923-9343 |