The estimated operating cash flows and the accounting profit In forecasting future cash flows .

This study aimed at obtaining empirical evidence from the Egyptian Business environment, regarding the ability of accounting earnings (measured in terms of net operating earnings and net earnings before tax) and operating cash flows in forecasting future operating cash flows using a sample of 49 companies listed on the Egyptian Exchange for the period from 2007 to 2014.The researcher used Simple Regression Model to investigate the ability of operating cash flows, net operating earnings and net earnings before tax (each measured separately) to predict the future operating cash flows. The empirical analysis results indicated the existence of direct relationships between the aforementioned dependent variables and future operating cash flows. However, the analysis revealed that the impact of operating cash flows on future operating cash flows is superior, followed by net operating earnings and then net earnings before tax, with R² equals (0.020), (27300) and (0.504) respectively. As the statistical analysis indicated that the forecasting ability of net operating earnings is greater than net earnings before tax, it was decided to add net operating earnings to historical operating cash flows as two independent variables in a multiple regression model in order to investigate their joint prediction power in forecasting future operating cash flows. The results of the statistical analysis indicated the increase in the explanatory power of the developed model in predicting the future operating cash flows. Additionally, the impact of two control variables namely, industry sector type and audit firm size was investigated and the results indicated that the sector type has an effect on the relationship between operating cash flows and net operating earnings from one side and operating cash flows from the other side, as R² increased from (0.573) to (0.552). However, audit firm size had no significant effect. Finally, in order to determine the robust forecasting model for future operating cash flows, the researcher used Thiel's Inequality Coefficient.  The analysis indicated the decrease in the coefficient value for the third model (i.e., in the case of using cash flows from operating activities and net operating earnings) in predicting future operating cash flows, taking into consideration the impact of industry sector which supports this model being the robust.