The Effect of Net Income and Operating Cash Flows in Predicting Future Operating Cash Flows (Case Study on Automotive and Component Enterprise Listed in Indonesia Stock Exchange 2016 - 2018)

Abstract

This study aims to determine the effect of net income and operating cash flow in predicting future operating cash flows for automotive and component enterprise listed on the Indonesia Stock Exchange for the period 2016 - 2018. The data used is secondary data in financial statement data for automotive and component enterprise obtained from www.IDX.co.id. The sampling technique used was purposive sampling and acquired ten enterprises according to the criteria. The variables tested are net income (X1), operating cash flow (X2), and future operating cash flow (Y). This study uses multiple linear regression and classical assumption tests for data analysis. Hypothesis testing in this study uses the t-test and F test. The critical value of t is determined by the degree of freedom, which is equal to n-1. The level of significance is 5% or 0,05 with degrees of freedom df = n-k-1. The conclusion of this study, H₀ is rejected, and H₁ is accepted, indicating that net income and operating cash flow influence future operating cash flows. Meanwhile, the role of net income and operating cash flow for future operating cash flows is 64,1%. In comparison, the remaining 35,9% is other factors outside the variables of net income, operating cash flow, and future operating cash flow.