Cash flow information : a comparison of its usefulness towards bankruptcy prediction in manufacturing and commercial industries.

• Main Author: Tay, Swee Wah.
• Other Authors: Nanyang Business School
• Format: Theses and Dissertations
• Language: English
• Published: 2010
• Subjects: DRNTU::Business::Accounting::Cash flow
• Online Access: http://hdl.handle.net/10356/42553
• Institution: Nanyang Technological University

The introduction of Statement of Accounting Standard 7 (Revised), titled "Cash Flow Statements", in Singapore in August 1994 suggests that cash flow statements are useful to the local community. Nonetheless, hitherto, no research has been conducted locally to establish empirically the utility of the cash flow information as per Statement of Accounting Standard 7 (Revised). Moreover, in United Kingdom, Financial Reporting Standard 1, that is parallel to Statement of Accounting Standard 7 (Revised), has been superseded by Financial Reporting Standard 1 (Revised 1996) to revise Financial Reporting Standard 1 to a "genuine" cash flow statement. This prompts queries on the usefulness of the cash flow reporting as mandated under Statement of Accounting Standard 7 (Revised). Accordingly, the research seeks to investigate and compare the usefulness of cash flow information as per Statement of Accounting Standard 7 (Revised) in bankruptcy prediction in manufacturing and commercial industries. Specifically, three aspects of usefulness are examined, namely, its univariate predictive value, its marginal predictive value, and its forewarning value.