The Investigation of the Predictive Ability of Operating Cash Flow

This paper has studied the predictive ability of operating cash flow. By using information of cash flow statement, the investors can predict the future cash flows. In this study, by using of 128 firm’s data from 1378 to 1384, we compare the predictive ability of operating cash flow based on Iranian accounting standard and operating cash flow based on SFAS # 95. The criterion for this comparison is the determinant of coefficient (R2). The results show that, the predictive ability of operating cash flow based on Iranian accounting standard is grater than operating cash flow based on IAS # 7.