Green National Accounts: Policy Uses and Empirical Experience
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The next section discusses contractual use of accounting earnings and implications for the inclusion of cash flow forecasts in earnings and the relative abilities of earnings and cash flows to forecast future earnings. Section 3 models operating cash flows and the accounting process by which operating cash flow forecasts are incorporated in earnings. Using observed point estimates of such parameters as average profit on sales, section 3 generates predictions for the relative abilities of earnings and operating cash flows to predict future operating cash flows and for the average time series properties of operating cash flows, accruals and earnings. Section...
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