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Author | : Ervin L. Black |
Publisher | : |
Total Pages | : |
Release | : 2000 |
Genre | : |
ISBN | : |
Download Life-Cycle Stage Effects on the Incremental Information Content of Earnings and Cash Flows Book in PDF, ePub and Kindle
Previous studies cross-sectionally pooled heterogeneous firms to examine the information content of earnings and cash flow measures. This study extends prior research; and is the first to examine the corporate life-cycle effects on the informativeness of earnings (NI), operating cash flows (CFO), financing cash flows (CFF), and investing cash flows (CFI). The life-cycle concept is an appealing economic context which allows for a relatively more homogenous study of these information content relationships. It is a concept used frequently in academic research and the financial press, because it captures a set of financial characteristics and strategies for firms in a particular life-cycle stage. This study examines both the informativeness of earnings and cash flow measures in each of four life-cycle stages: Start- up, Growth, Mature, and Decline. Hypotheses are developed predicting that earnings and operating cash flows contain incremental information content in life-cycle stages when a firm's assets in place are a major component of firm value. Financing cash flows and investing cash flows are expected to be incrementally informative during stages characterized by growth or uncertainty. The results are consistent with the hypothesis that neither NI, nor CFO are incrementally informative in the start-up stage, characterized by few assets in place. When there are relatively more assets in place in the growth, mature, and decline stages; however, the results support the hypothesis that NI and CFO contain incremental information. Hypotheses regarding CFF and CFI are generally supported. Results support the incremental informativeness of CFF in the growth, mature, and decline stages; but not in the start-up stage. CFI is informative in all life-cycle stages. These results provide support for the usefulness of the cash flow statement required by FAS 95.
Author | : Ray J. Pfeiffer |
Publisher | : |
Total Pages | : |
Release | : 1999 |
Genre | : |
ISBN | : |
Download Additional Evidence on the Incremental Information Content of Cash Flows and Accruals Book in PDF, ePub and Kindle
This study evaluates the relation between security returns and funds-based earnings components. We document that proxies for market expectations of the components that are based on measures of historical serial- and cross-dependencies are substantially more accurate than random-walk proxies. Moreover, we detect significantly higher valuations of the operating cash flow component of earnings, relative to current accruals when market expectations are represented using the dependency-based predictions. Such differential valuation is not detectable for random-walk representations. Contrary to results in Ali (1994), we find incremental information in unexpected cash flows over the whole spectrum (moderate and extreme) of unexpected cash flow realizations.
Author | : John Douglas Hanna |
Publisher | : Ann Arbor, Mich. : University Microfilms International |
Total Pages | : 268 |
Release | : 1991 |
Genre | : |
ISBN | : |
Download A Further Examination of the Incremental Information Content of Cash-flow Announcements Book in PDF, ePub and Kindle
Author | : Gordon Peter Wilson |
Publisher | : |
Total Pages | : 114 |
Release | : 1986 |
Genre | : Financial statements |
ISBN | : |
Download The Incremental Information Content of Accruals and Cash Flows After Controlling for Earnings Book in PDF, ePub and Kindle
Author | : Ashiq Ali |
Publisher | : |
Total Pages | : 30 |
Release | : 1992 |
Genre | : |
ISBN | : |
Download The Incremental Information Content of Earnings Book in PDF, ePub and Kindle
Author | : Cynthia Wilson |
Publisher | : |
Total Pages | : 33 |
Release | : 1993 |
Genre | : Cash flow |
ISBN | : |
Download Incremental Information Content of Cash Flows Book in PDF, ePub and Kindle
Author | : Moon Kyum Kim |
Publisher | : |
Total Pages | : 242 |
Release | : 1991 |
Genre | : Investment analysis |
ISBN | : |
Download Incremental Information Content of Cash Flow Variables Book in PDF, ePub and Kindle
This study investigates whether alternative cash flow measures have an incremental information content over accounting measure. This study employes the arbitrage argument to establish an economic model which makes it possible to incorporate raw accounting variables into a return generating process. Based on the economic model, a new methodology, the spanning portfolio approach is used to extract the information contained in the accounting measures of cash flow. This issue is first examined by testing for an association between actual security returns and spanning returns of alternative cash flow measures. Secondly, the issue is analyzed in the context of explaining market risk. The results indicate that both cash flow and accrual accounting earnings have incremental information content relative to each other in explaining the actual security returns. Also, the results reveal that, in explaining market risk, only cash flow has information consistent with that contained in market risk measure (market beta) and provides significant incremental information over that provided by earnings. These findings imply that the accrual adjustment process in accounting may not be valuable at least for assessing the company's systematic risk.
Author | : |
Publisher | : |
Total Pages | : |
Release | : 2003 |
Genre | : Cash flow |
ISBN | : 9789741735426 |
Download Determinants of Incremental Information Content of Cash Flows Beyond Earnings Book in PDF, ePub and Kindle
Author | : Michael Ofosu Mensah |
Publisher | : |
Total Pages | : 108 |
Release | : 1990 |
Genre | : Cash flow |
ISBN | : |
Download The Incremental Information Content of Cash Flow from Operations-an Exploratory Study of Intertemporal and Firm-specific Effects Book in PDF, ePub and Kindle
Author | : Robert P. Crum |
Publisher | : |
Total Pages | : 62 |
Release | : 1987 |
Genre | : |
ISBN | : |
Download The Information Content of Cash-flow Measures in Dividend Policy Book in PDF, ePub and Kindle