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Research Article Open access CC BY 4.0

Cash Flows and Earnings in Predicting Future Cash Flows: A Study of Deposit Money Banks in Nigeria

Adebimpe Otu Umoren, Nsima Umoffong

Advances in Research · pp. 1–13 · Published 19 May 2018

10.9734/AIR/2018/41226

Abstract

The researchers examined the abilities of past cash flows and past earnings in predicting future operating cash flows of Nigerian Money deposit banks. Ex-post facto design was used in conducting the study while sampling 13 out of the 14 deposit money banks listed on the Nigerian Stock Exchange from 2011 to 2016. The study employed Descriptive statistics, Pearson correlation and OLS regression techniques; where key findings revealed that past earnings has ability in predicting future operating cash flows than past cash flows. In addition the study revealed that disaggregation of earnings into net income and other comprehensive income generate superior explanatory power compared to total comprehensive income with regards to predicting future operating cash flows. Overall, this study provides evidence on the usefulness of earnings computed under IFRS to predict future cash flows of quoted deposit money banks in Nigeria.  

Past cash flow past earnings future cash flow prediction listed money deposit banks Nigeria

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