A multivariate time-series prediction model for cash-flow data

Article Abstract:

A study was conducted to find evidence of the time-series properties and predictive capability of cash-flow data. A new multivariate, time-series prediction model using past values of earnings, short-term accruals and cash-flows as independent variables in a time-series regression was developed. Data were collected from a sample of firms on which the accuracy of one-step-ahead cash-flow predictions is examined for the 1989-1991 holdout period. Predictive results demonstrate that the model is better than firm-specific and common-structure autoregressive integrated moving average models. The model is also found to outperform a popular multivariate, cross-sectional regression model. The robustness of the findings is evidenced across alternative cash-flow metrics. The results support the FASB position that cash-flow prediction can be improved by including earnings and accrual accounting data.

Methods, Models, Cash flow, Business forecasting, Time-series analysis, Time series analysis

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Maquiladoras: the Mexico option can reduce your manufacturing cost

Article Abstract:

Maquiladora plants are manufacturing facilities, typically termed a twin or in-bond plant, located in Mexico that process materials or commodities obtained from a foreign supplier for reexport. Maquiladora plants typically are located along the US-Mexico border and mainly deal with US manufacturers. The Maquiladora program gives US manufacturers access to cheap labor in a politically stable country close to the US. The advantage of using Mexico as a basis for off-shore manufacturing is that communications and transportation are direct and a constant supply and support network can be maintained without major interruption. US manufacturers also receive special tariff treatment and lower utility costs. There are three approaches to setting up maquiladora operations: ownership of a maquiladora corporation, shelter operations, or contracting.

Mexico, Offshore assembly industry

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Uses of indexes and data bases for information release analysis

Article Abstract:

The relative effectiveness of searches of the Wall Street Journal Index and Dialog data base are examined. The Wall Street Journal Index proved more effective than Dialog. A substantial amount of information did not appear in either service, however. The Wall Street Journal Index is more likely to identify financial announcements than other types of news. Stock price data presented in the study indicate that items not appearing in the Wall Street Journal are as likely to cause significant price reactions as items that do appear in the index.

Research, Analysis, Information services, Finance, Databases, Online searching, Abstracting and indexing services

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