Empirical study on the usage of cash flow statement as a tool to predict company financial distress / Shariful Amran Abd Rahman

Abd Rahman, Shariful Amran (2001) Empirical study on the usage of cash flow statement as a tool to predict company financial distress / Shariful Amran Abd Rahman. Masters thesis, Universiti Teknologi MARA.

Abstract

This study was carried out to examine whether cash flow can be a good predictor to debt restructuring companies. Sixty companies of Kuala Lumpur Stock Exchange (KLSE) have been identified as a sample in the current study. Thirty companies were classified as debt restructuring and another 30 matching companies were classified as non-debt restructuring companies. The classification was done in order to determine the differences between cash flow related ratios such as cash flow changes, cash flow over total debt, cash flow over total assets, cash flow over current liabilities and cash flow per share issued.
The study hypothesized that the means for the cash flow based ratios have no significant difference between debt restructuring and non-debt restructuring companies. Based on trend analysis, there is no obvious pattern obtained from the graph plotted using average figure for each of the cash flow related ratios. Trend analysis and Mann- Whitney U test show that no significant difference exists between the means for debt restructuring and non-debt restructuring companies for all the cash flow related ratios.
The results from stepwise logistic regression analysis further strengthen the hypothesis that the cash flow information does not have predictive power. Even though cash flow information has no predictive ability to forecast financial distress, it is useful for inter-company comparison.

Metadata

Item Type: Thesis (Masters)
Creators:
Creators
Email / ID Num.
Abd Rahman, Shariful Amran
UNSPECIFIED
Subjects: H Social Sciences > HF Commerce > Accounting. Bookkeeping > Accounts and books. General works > Cash handbook. Cash flow
H Social Sciences > HG Finance
Divisions: Universiti Teknologi MARA, Shah Alam > Faculty of Accountancy
Keywords: Cash flow, Kuala Lumpur Stock Exchange (KLSE), debt restructuring, non-debt restructuring, companies
Date: 2001
URI: https://ir.uitm.edu.my/id/eprint/1903
Edit Item
Edit Item

Download

[thumbnail of TM_SHARIFUL AMRAN ABD RAHMAN AC 01_5 1.pdf] Text
TM_SHARIFUL AMRAN ABD RAHMAN AC 01_5 1.pdf

Download (216kB)

Digital Copy

Digital (fulltext) is available at:

Physical Copy

Physical status and holdings:
Item Status:

ID Number

1903

Indexing

Statistic

Statistic details