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Porträtt av Niclas Andrén. Foto.

Niclas Andrén

Prefekt Företagsekonomiska institutionen

Porträtt av Niclas Andrén. Foto.

Disappearing investment‐cash flow sensitivities: earnings have not become a worse proxy for cash flow

Författare

  • Niclas Andrén
  • Håkan Jankensgård

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