The use of arima model in forecasting accounts payable

Abstract

© 2019, Research Trend. All rights reserved. The authors obtained a forecast of accounts payable of a public enterprise providing communication services and the Internet. In the work the authors performed evaluation of models ARIMA with the acceptable identification according to the methodology of Box-Jenkins. On a sample of 29 quarterly observations on accounts payable estimated model ARMA (1;0), ARMA (1;1), ARIMA (1;1;1), ARIMA (0;1;1). The authors focused on the method of selecting the most valid model according to the criteria RMSE and AIC used the method of selection of the designated circle of the most simple model with the fewest parameters. The forecast estimate confirmed the hypothesis of a decrease in the value of accounts payable. The reliability of the results is confirmed by the information criterion of Akaike, the mean square error of the forecast, the diagnosis of residues on the normal distribution using a special test and the absence of autocorrelation using the Ljung-Box test. The results of the empirical estimates confirmed the feasibility of practical use of this approach in forecasting the accounts payable of public companies with a stable financial position. The projected amount of accounts payable will allow the company to control the probability and signs of bankruptcy, to form a forecast balance sheet and to implement the mechanisms of debt management strategy. There is a possibility of comparative analysis of various options of contractual work in terms of providing additional payment in the form of interest for deferred payment, installment debt repayment and the use of other similar debt management tools.