Net cash flow models: Towards the black box approach

Research in construction financial management has frequently centred on the development, usage and accuracy assessment of cash-flow forecasting tools and techniques. The conventional approach simulates S-curves of anticipated flows of cash in and out of the contracting organization using step calculation. However, such approaches take no cognisance of the anticipated construction programme or detailed data contained in tender documentation and other soft issues such the effects of payment delays. This research addresses this matter by making an assessment of the feasibility of developing a black box approach that utilizes simple multi-linear regression modelling. Data were simulated and examined in a pilot study using selected variables. The results of the research were inconclusive and it is suggested that further work in this area should focus non-linear regression models and ANNs