The role of operating accounting accruals in explaining cash-flows : evidence from Algerian companies 2011-2018

الملخص EN

The purpose of this study is to explore the ability of operating accounting accruals to explain cash flows of Algerian companies.

Our sample included an unbalanced panel data of 97 year-firm observations from 17 companies during the period 2011-2018.

Cash flows were measured by the net cash flows from operations, while operating accruals were expressed by the change in inventories, change in debtors, and change in creditors.

Results indicate a weak ability of operating accruals to explain cash flows as no statistically significant relationship was found between cash flows and operating accruals except for the change in debtors which was significant.

In contrast, we found a strong and statistically significant positive relationship between cash flows and total accruals.

Therefore, we concluded that the total accruals are a better indicator than operating accruals for cash flows in Algerian companies.