Niclas Andrén
Prefekt Företagsekonomiska institutionen
Disappearing investment‐cash flow sensitivities: earnings have not become a worse proxy for cash flow
Författare
Summary, in English
According to a recent conjecture in the literature, earnings have become a poorer proxy for cash flow from operations over time. We find that since 1988, when cash flow statements started to be consistently reported in Compustat, the cash effectiveness of earnings has actually increased for a large sample of U.S. manufacturing firms. This occurs despite the introduction of fair value accounting and increasing accounting accruals during the last three decades. Also contrary to the conjecture, using more comprehensive measures of cash flow does not restore the investment‐cash flow sensitivity, which continues to be around 0.05 in more recent periods.
Avdelning/ar
- Redovisning och finans
Publiceringsår
2020-01-14
Språk
Engelska
Sidor
760-785
Publikation/Tidskrift/Serie
Journal of Business Finance & Accounting
Volym
47
Issue
5-6
Dokumenttyp
Artikel i tidskrift
Förlag
Wiley-Blackwell
Ämne
- Business Administration
Nyckelord
- Investment
- financial constraints
- investment-cash flow sensitivity
- cash effectiveness
- cash flow
- earnings
- accruals
- G30
- G32
- M41
Status
Published
ISBN/ISSN/Övrigt
- ISSN: 1468-5957