The Cash Flow Statement (CFS) is a valuable tool to analyze the effects of operational, investment and financing activities on the cash flow in a certain period of time. The disclosure of this Financial Statement is not mandatory in Brazil. Thus, when information related to the Operating Cash Flow (OCF) is needed but not available, it is estimated. This study evaluates the adequacy of a specific OCF estimation technique, based on adjustments from the other financial statements (Balance Sheet, Profit and Loss Statement and the Funds Statement). First, this study relates the estimated OCF to logical arguments and numerical simulations in order to conceptually evaluate whether this measure would be a reasonable approximation of the OCF that is taken from the CFS. Next, a set of companies in Brazil is evaluated, which were included in the "Exame - Melhores e Maiores" magazine data base and spontaneously published the CFS in 2000 and 2001. The estimated OCF is calculated and, then, compared with the disclosed OCF to empirically validate the estimation technique quoted above, pointing out its actual efficiency, mainly based on the Wilcoxon test.
Balance Sheet; Cash Flow; Accounting
