prediction of future cash flows are of extreme usefulness andvalue.There are two issues to be considered when attempting topredict a firm’s cash flows. First, the variables those are use-ful and informative to cash forecast need to be identified andincorporated into the forecast model. Secondly, the type andstructure of models to be employed in the forecast should becarefully chosen to provide a more accurate prediction. Thisstudy shed light on both issues, intending to demonstrate theprocedure of choosing variables and models for more accurateprediction. There are a number of difficulties with cash flowprediction. Generally speaking, cash flow is more volatile thanearnings and thus harder to predict. There is no uniform cash flowgenerating process for the whole business world and differentcompanies provide distinct patterns of cash flows. Besides, dueto the popularity of credit trade, a firm’s revenue and expensesare not equal to cash inflow and outflow and this compoundsthe problem of accurate cash flow prediction. Academic studieson cash flow prediction rely on public information as reflectedin a firm’s financial statement for cash flow data. Amongthe variables that have been found usefulness in cash flow