Title: CAPABILITY OF OPERATING CASH FLOWS DIRECT METHOD AS A PREDICTOR OF FUTURE OPERATING CASH FLOWS, PROFITS AND DIVIDENDS

Author: ZUHROTUL ISNAINI

Affiliations: Master of Accounting Study Program, Faculty of Economics and Business, Universitas Airlangga Surabaya

Publisher: Universitas Airlangga

Abstract

This research is a test of the ability of direct method operating cash flow as a predictor of future operating cash flow, profits and dividends. The direct method of operating cash flow is believed by FASB (1987) and AASB 1026 (1992) to have more accurate capabilities as a predictor of future operating cash flows. Research conducted by Ou and Penman (1992), Finger (1994), Krishnan & Largay (2000), Kusuma H. ​​(2001), Suardhika (2003) shows that the direct cash flow method has predictive ability as a predictor of future operating cash flows. , profits and dividends. Various previous studies were used as reference for hypotheses in this research.

The type of research used to prove the proposed hypothesis is quantitative research with the scope of research being industrial companies listed on the Jakarta Stock Exchange during the period 2000-2003 as the prediction year. This research was conducted since 2000, because since 2000 the capital market authority (Bapepam) has required all listed companies to use the direct cash flow method: The purposive sampling method was used to select those that will be used in this test. Data collection was carried out using secondary data documentation methods from unqualified opinion financial reports, especially cash flow reports, as well as footnotes in industrial companies. Then the data collected was analyzed using SPSS series 11 with regression techniques.

The results of testing the hypothesis confirm that operating cash flow is proven to have significant capabilities as a predictor of future operating cash flow, profits and dividends.

Keywords: Future Operation Cash Flow, Earnings, Dividend and Cash Flow Statement in Direct Operation Method

Sources: http://repository.unair.ac.id/36101/