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Informativeness and Predictability of Earnings and Cash Flows

Informativeness and Predictability of Earnings and Cash Flows PDF Author: Zhemin Wang
Publisher:
ISBN:
Category :
Languages : en
Pages : 236

Book Description


Informativeness and Predictability of Earnings and Cash Flows

Informativeness and Predictability of Earnings and Cash Flows PDF Author: Zhemin Wang
Publisher:
ISBN:
Category :
Languages : en
Pages : 236

Book Description


The Usefulness of Accounting Estimates for Predicting Cash Flows and Earnings

The Usefulness of Accounting Estimates for Predicting Cash Flows and Earnings PDF Author: Siyi Li
Publisher:
ISBN:
Category :
Languages : en
Pages : 64

Book Description
Estimates and projections are embedded in most financial statement items. These estimates potentially improve the relevance of financial information by providing managers the means to convey to investors forward-looking, inside information (e.g., on future collections from customers via the bad debt provision). On the other hand, the quality of financial information is compromised by: (i) the increasing difficulty of making reliable forecasts in a fast-changing, often turbulent economy, and (ii) the frequent managerial misuse of estimates to manipulate financial data. Given the ever-increasing prevalence of estimates in accounting data, whether these opposing forces result in an improvement in the quality of financial information or not is among the most fundamental issues in accounting. We examine in this study the contribution of accounting estimates embedded in accruals to the quality of financial information, as reflected by their usefulness in the prediction of enterprise cash flows and earnings. Our extensive out-of-sample tests, reflecting both the statistical and economic significance of estimates, indicate that accounting estimates beyond those in working capital items do not improve the prediction of cash flows. Estimates do, however, improve the prediction of next year's earnings, though not of subsequent years' earnings. Our economic significance tests corroborate that accounting estimates do not improve cash flow or earnings prediction. We conclude that the usefulness of accounting estimates to investors is limited, and provide suggestions for improving their usefulness.

An Empirical Investigation of the Usefulness of Financial Reporting Information in Predicting Future Cash Flows

An Empirical Investigation of the Usefulness of Financial Reporting Information in Predicting Future Cash Flows PDF Author: Arthur Bruce Caster
Publisher:
ISBN:
Category : Cash flow
Languages : en
Pages : 262

Book Description


Earnings quality and earnings management

Earnings quality and earnings management PDF Author: Sanjay Wikash Bissessur
Publisher: Rozenberg Publishers
ISBN: 9051709870
Category :
Languages : en
Pages : 217

Book Description


the nature and amount of information reflected in cash flows and accruals

the nature and amount of information reflected in cash flows and accruals PDF Author: victor l. bernard and thomas l. stober
Publisher:
ISBN:
Category :
Languages : en
Pages : 56

Book Description


Beyond Earnings

Beyond Earnings PDF Author: David A. Holland
Publisher: John Wiley & Sons
ISBN: 1119440483
Category : Business & Economics
Languages : en
Pages : 421

Book Description
Beyond Earnings is targeted at investors, financial professionals, and students who want to improve their ability to analyze financial statements, forecast cash flows, and ultimately value a company. The authors demonstrate that reported earnings are easily gamed by accounting shenanigans and reveal how commonly used profitability measures such as return on equity can be misleading. Because earnings and P/E ratios are too unreliable for valuation, this book takes you beyond earnings and shows you how to apply the HOLT CFROI and Economic Profit framework in a step-by-step manner. A better measure of profitability results in improved capital allocation decisions and fundamental valuations. This ground-breaking book offers the first practical in-depth discussion of how profitability and growth fade, and shows how to put this information to work right away. The authors introduce their trailblazing Fundamental Pricing Model which includes fade as an adjustable value driver and can be used to value the impact of business model disruption. As the authors explain, the key to superior stock picking is understanding the expectations embedded in a stock’s price and having a clear view of whether the company can beat those expectations. The HOLT framework has been rigorously field tested for over 40 years by global investment professionals to help them make better stock picks and by corporate managers to understand the expectations embedded in their stock price. Beyond Earnings is an indispensable guide for investors who want to improve their odds of outperforming the competition.

Cash Flow Forecasting

Cash Flow Forecasting PDF Author: Andrew Fight
Publisher: Elsevier
ISBN: 0080492533
Category : Business & Economics
Languages : en
Pages : 263

Book Description
Budgets are like road maps -- they provide a direction for a corporates financial management. Balance sheets and statements of revenues also provide insights into how well a company is following that direction. But cash flow and cash flow forecasts are what guide the day-to-day itinerary for an organization. Budgets and cash flow are dynamic -- adjustments and changes can and should occur. If you understand what you are looking at, you can use cash flow to create better budgets and thus more accurate cash flow forecasting. Cash Flow Forecasting outlines the techniques required to undertake a detailed analysis of the cash flow dynamics of the business from both a historical and forward looking perspective. Cash Flow Forecasting explains how to: * Determine appropriate cash flow figures from pro forma financial statements * Interpret detailed cash flow forecasts and understand the difference between profit and cash flow * Conserve or generate cash in the short term * Evaluate different methods of project evaluation * Recognize the limitations of accounting information in valuing companies *Inspired by basic entry level training courses that have been developed by major international banks worldwide * Will enable students and those already in the finance profession to gain an understanding of the basic information and principles of cash flow forecasting * Includes questions with answers, study topics, practical "real world" examples and extensive bibliography

Earnings Or Cash Flows

Earnings Or Cash Flows PDF Author: A. Rashad Abdel-Khalik
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 118

Book Description


The Effect of Contextual Factors on the Information Content of Cash Flows in Explaining Stock Prices - the Case of Amman Stock Exchange

The Effect of Contextual Factors on the Information Content of Cash Flows in Explaining Stock Prices - the Case of Amman Stock Exchange PDF Author: Ali M. Al-Attar
Publisher:
ISBN:
Category :
Languages : en
Pages :

Book Description
This article aims to determine which is better earnings or cash flows as performance measure. We follow the more direct approach used in several recent U.S. studies, in which earnings and cash flows are considered as competing variables. Specifically, our methodology is a development of the study of Dechow (1994). We provide a replication of her main analysis, and then extend this to deal with the effect of earnings permanence, earnings growth and firm size on the value relevance of cash flow and earnings. Our study provides an evidence on the relevance of cash flow figures for investors in their investment decision in an emerging stock market. The study covers the case of Amman Stock Exchange (ASE) and employs data on a sample of industrial firms. The time horizon of this study includes the period of 1993-2001. The results of the current study indicate that earnings and cash flows have information content regarding the prediction of future cash flows. Cash flows and earnings separately have a significant association with stock return. The results show that there is no significant difference between the ability of earnings and cash flows in explaining the variation in stock return. Furthermore, as the earnings growth is low and the firm's size is small, the operating cash flow considered better than earnings as performance measure.

Financial Reporting and Analysis

Financial Reporting and Analysis PDF Author: Lawrence Revsine
Publisher: McGraw-Hill/Irwin
ISBN: 9780073527093
Category : Business & Economics
Languages : en
Pages : 0

Book Description
Financial Reporting & Analysis (FR&A) by Revsine/Collins/Johnson/Mittelstaedt emphasizes both the process of financial reporting and the analysis of financial statements. This book employs a true "user" perspective by discussing the contracting and decision implications of accounting and this helps readers understand why accounting choices matter and to whom. Revsine, Collins, Johnson, and Mittelstaedt train their readers to be good financial detectives, able to read, use, and interpret the statements and-most importantly understand how and why managers can utilize the flexibility in GAAP to manipulate the numbers for their own purposes.