Testing Fleuriet’s Model Predictive Capacity: an Analysis with B3 Listed Companies

Abstract

This work tests Fleuriet’s model capacity to predict the operational result and the net profit of Brazilian companies listed on the B3, considering the period between 2007 and 2017. The research is sustained by an Ordinary Least Squares econometric analysis, conducted with 210 companies, considering the profile and the mean behavior during the chosen time window. The results points out that Fleuriet’s model have difficulties to identify year-to-year companies’ result variation. Annual data studies demanded the inclusion of new relevant variables capable to describe better short-term movements in order to guarantee adjust and robustness. The same variables built a robust model capable to describe long run behavior, ideal to study mid-term investments, when market and abnormal effects are diluted. The ratio between cash balance (ST) and working capital (CDG), in relation to total assets, demonstrated a positive correlation with companies’ financial performance, while the working capital requirement (NCG) presented a different result according to the performance measurement variable.