The Impact of High Earnings on the Informational Content of Cash Flows in the Listed Companies on Tehran Stock Exchange
This paper tries to investigate the incremental informational content of cash flow from operations and earnings as well as the impact of high earnings on the informational content of cash flows and earnings by exploring the relationship between cash from operations and net earnings and companies’ stock return. The study sample was chosen over the time period of 2006 to 2010 of listed companies on Tehran Stock Exchange and included 150 selected companies using systematic elimination method. According to the theoretical principles and literature of the topic for analyzing data, one main hypothesis and four sub-hypotheses are were proposed and were tested along with the corresponding models. Findings suggest that earnings in relation to cash flow from operations have greater informational content. The high earnings also has no negative impact on the informational content of earnings and when earnings is at its high level, there is no difference between informational content of high and low cash flow.
Volume (Year): 3 (2013)
Issue (Month): 4 (October)
|Contact details of provider:|| Web page: http://hrmars.com/index.php/pages/detail/Accounting-Finance-Journal|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Prodosh Eugene Simlai, 2013. "Cash-flows, earnings, and time-varying expected stock returns," Journal of Economic and Administrative Sciences, Emerald Group Publishing, vol. 29(1), pages 42-62, May.
- Hirshleifer, David & Hou, Kewei & Teoh, Siew Hong, 2009. "Accruals, cash flows, and aggregate stock returns," Journal of Financial Economics, Elsevier, vol. 91(3), pages 389-406, March.
- John Consler, 2011. "Earnings per share versus cash flow per share as predictor of dividends per share," Managerial Finance, Emerald Group Publishing, vol. 37(5), pages 482-488, April.
- Allen, Eric J. & Larson, Chad R. & Sloan, Richard G., 2013. "Accrual reversals, earnings and stock returns," Journal of Accounting and Economics, Elsevier, vol. 56(1), pages 113-129.
- Christos I. Negakis, 2013. "The explanatory power of earnings for stock returns in the pre- and post-IFRS era," Managerial Finance, Emerald Group Publishing, vol. 39(9), pages 814-824, August.
When requesting a correction, please mention this item's handle: RePEc:hur:ijaraf:v:3:y:2013:i:4:p:215-223. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hassan Danial Aslam)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.