Accrual accounting basis and cash flow future predictions

Abstract

Cash flow statement is considered one of the key financial statements that the accounting standards, rules whether international or local have obliged companies to prepare at the end of the end of the period year, in addition to the other financial such as income statement and the statements financial position. The statements of cash flow is regarded as the most significant tool for financial analysis that helps users to make different types of economics decisions with a degree of rationality and reasonability, as well as predicting the future of company. The aim of this paper is to show the relationship between the statement of cash flows based on accrual and future forecasts of cash flow for companies by analyzing figures and ratios of this statement. To achieve the objectives of the paper, the researcher relied on reviewing 14 related studies that were published in different journals and by different authors for time periods (2016 - 2020). This study reached a number of results based on the aforesaid studies, the most important of which is that the accrual-based accounting rules relate to the future cash flow of companies, including accounts receivable, accounts payable, expenses, depreciation, etc. Moreover, based on these results, it is expected that future research will explore other financial factors that influence the company's future cash flow, for example, the company's financial risk.