The ability of cash flows to predict the earning: Evidence from Jordan
This study aims to investigate the ability of cash flows components to predict the earning and to know the extent of the relationship between accounting profits and cash flow measures. The study sample consisted of 77 industrial companies listed on the Amman Stock Exchange in Jordan for the period f...
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| Format: | Article |
| Language: | English |
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LLC "CPC "Business Perspectives"
2021-10-01
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| Series: | Investment Management & Financial Innovations |
| Subjects: | |
| Online Access: | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/15672/IMFI_2021_04_Shubita.pdf |
| _version_ | 1818978450276352000 |
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| author | Mohammad Fawzi Shubita |
| author_facet | Mohammad Fawzi Shubita |
| author_sort | Mohammad Fawzi Shubita |
| collection | DOAJ |
| description | This study aims to investigate the ability of cash flows components to predict the earning and to know the extent of the relationship between accounting profits and cash flow measures. The study sample consisted of 77 industrial companies listed on the Amman Stock Exchange in Jordan for the period from 2006 to 2019. This study relied on the regression method to test the relationship between the study variables. The study findings showed that the cash flows from operating, investing, and financial activities have a statistically significant impact on predicting future earnings. The study also examined the effect of length of operating cycle and company’s size on the predictive ability of cash flows regarding future earnings. The main results for this aspect are that large companies and short operating cycle companies have higher prediction ability for future earnings than small and long operating cycle companies. This paper provides evidence of the information content of cash flows for future earnings in emerging markets like Jordan and is important for Jordanian shareholders by enabling them to evaluate company’s performance.
AcknowledgmentsI would like to thank Amman Arab University for its great support, and for funding this study. |
| first_indexed | 2024-12-20T16:43:50Z |
| format | Article |
| id | doaj.art-54dd4b40c9aa4b5bb76078cd154716f7 |
| institution | Directory Open Access Journal |
| issn | 1810-4967 1812-9358 |
| language | English |
| last_indexed | 2024-12-20T16:43:50Z |
| publishDate | 2021-10-01 |
| publisher | LLC "CPC "Business Perspectives" |
| record_format | Article |
| series | Investment Management & Financial Innovations |
| spelling | doaj.art-54dd4b40c9aa4b5bb76078cd154716f72022-12-21T19:32:58ZengLLC "CPC "Business Perspectives"Investment Management & Financial Innovations1810-49671812-93582021-10-01184364410.21511/imfi.18(4).2021.0415672The ability of cash flows to predict the earning: Evidence from JordanMohammad Fawzi Shubita0https://orcid.org/0000-0001-7389-2108Professor, Head of Accounting Department, Amman Arab UniversityThis study aims to investigate the ability of cash flows components to predict the earning and to know the extent of the relationship between accounting profits and cash flow measures. The study sample consisted of 77 industrial companies listed on the Amman Stock Exchange in Jordan for the period from 2006 to 2019. This study relied on the regression method to test the relationship between the study variables. The study findings showed that the cash flows from operating, investing, and financial activities have a statistically significant impact on predicting future earnings. The study also examined the effect of length of operating cycle and company’s size on the predictive ability of cash flows regarding future earnings. The main results for this aspect are that large companies and short operating cycle companies have higher prediction ability for future earnings than small and long operating cycle companies. This paper provides evidence of the information content of cash flows for future earnings in emerging markets like Jordan and is important for Jordanian shareholders by enabling them to evaluate company’s performance. AcknowledgmentsI would like to thank Amman Arab University for its great support, and for funding this study.https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/15672/IMFI_2021_04_Shubita.pdfcash flowearningsinformation contentJordanmarket analysis |
| spellingShingle | Mohammad Fawzi Shubita The ability of cash flows to predict the earning: Evidence from Jordan Investment Management & Financial Innovations cash flow earnings information content Jordan market analysis |
| title | The ability of cash flows to predict the earning: Evidence from Jordan |
| title_full | The ability of cash flows to predict the earning: Evidence from Jordan |
| title_fullStr | The ability of cash flows to predict the earning: Evidence from Jordan |
| title_full_unstemmed | The ability of cash flows to predict the earning: Evidence from Jordan |
| title_short | The ability of cash flows to predict the earning: Evidence from Jordan |
| title_sort | ability of cash flows to predict the earning evidence from jordan |
| topic | cash flow earnings information content Jordan market analysis |
| url | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/15672/IMFI_2021_04_Shubita.pdf |
| work_keys_str_mv | AT mohammadfawzishubita theabilityofcashflowstopredicttheearningevidencefromjordan AT mohammadfawzishubita abilityofcashflowstopredicttheearningevidencefromjordan |