IDEAS home Printed from https://ideas.repec.org/a/eme/rafpps/v7y2008i2p150-166.html
   My bibliography  Save this article

Market valuation of accrual components

Author

Listed:
  • Rick Francis

Abstract

Purpose - The purpose of this paper is to generate empirical evidence that facilitates our understanding of the market pricing for cash flows and accruals. Design/methodology/approach - The study is empirical in nature, and utilizes and archival methodology. Findings - The evidence in this study supports the primary hypothesis that the market valuations for the receivable accrual are greater than the valuations for other current accruals. Additionally, the results suggest that market valuations for cash flows are not monotonically greater than the valuations for accruals. Research limitations/implications - Overall, the results of this study suggest that inferences about the market's valuation of cash flows and accruals must consider multiple sources of variation in a concurrent fashion. Practical implications - Models for equity valuation used by financial analysts, institutional investors, etc. should allow the various components of accruals to act independently. Originality/value - This study contributes to the literature by synthesizing various aspects of capital markets research in accounting to enhance our understanding of the role that cash flows and accruals maintain for equity valuation.

Suggested Citation

  • Rick Francis, 2008. "Market valuation of accrual components," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 7(2), pages 150-166, May.
    • Handle: RePEc:eme:rafpps:v:7:y:2008:i:2:p:150-166
    DOI: 10.1108/14757700810874128
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/14757700810874128/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/14757700810874128/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/14757700810874128?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:rafpps:v:7:y:2008:i:2:p:150-166. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.