Cash flow based ratio vs. accrual based ratio / Shariful Amran and Ruslaina Yusoff

Amran, Shariful and Yusoff, Ruslaina (2006) Cash flow based ratio vs. accrual based ratio / Shariful Amran and Ruslaina Yusoff. Jurnal Intelek, 4 (2). pp. 27-43. ISSN 2231-7716


This study was carried out to examine whether cash flow can be a good predictor to financially distressed companies. Thirty companies have been identified as
financially distress companies based on the PN4 listing obtained from the Bursa Malaysia (MSE). The financial data of financially distress companies were studied over a period of ten years from 1993-2002. Cash Flow Based ratio and Accrual Based ratios were calculated using the financial data obtained from these companies. The study hypothesized that there is a difference in trend between
Cash Flow based ratio and Accrual Based ratio for financially distress companies. Based on both the types of ratio calculated, trend analyses were conducted. It was
found out that there is no obvious pattern obtained from the graph plotted using average figure for each type of ratio. Even though cash flow based ratio gives mixed results on its ability to predict financially distress company it is still useful for inter-company comparisons.


Item Type: Article
Email / ID Num.
Amran, Shariful
Yusoff, Ruslaina
Subjects: H Social Sciences > HG Finance > Financial management. Business finance. Corporation finance > Cash position. Cash management > Malaysia
H Social Sciences > HJ Public Finance > Income and expenditure. Budget
Divisions: Universiti Teknologi MARA, Perlis > Arau Campus > Unit of Research, Development and Commercialization (URDC)
Journal or Publication Title: Jurnal Intelek
UiTM Journal Collections: UiTM Journal > Jurnal Intelek (JI)
ISSN: 2231-7716
Volume: 4
Number: 2
Page Range: pp. 27-43
Keywords: Cash Flow; Based Ratio; Accrual Based Ratio
Date: 2006
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