Alteration Of Net Profit, Debt, Inventory And Depreciation Cost On Future Operating Cash Flows

Abstract

This aim of this study is to analyze the effect of net income, changes in debt, inventory, and depreciation expense on cash flows for future operating activities as the dependent variable. The model in this research follow the signaling theory assumption to develop the hypothesis. This is kualitatif research and use purposive sampling technique to analyse the data, and calculated by multiple regression with SPSS. The Sample are companies listed in the LQ45 Index on BEI (Indonesia Stock Exchange) for six years. The results of this study found that net income, changes in debt and depreciation expense have positive effect, while changes in inventory have a negative effect on cash flows in future operating activities. This findings confirm all of signalling theory assumption and contribute to the financial practice in the similar companies. The companies should consider their financial condition to predict their future operational cash flow as management decision process.