The effect of earnings permanence, growth and firm size on the usefulness of cash flows and earnings in explaining security returns: empirical evidence for the UK

Article Abstract:

A new study examines the relative information content of earnings and cash flows for security returns using a method that incorporates contextual factors which may have relevance to earnings and cash flow response coefficients.

United States, Finance, Brief Article, Accounting, Corporations, Corporate finance

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The association between operating cash flows and dividend changes: an empirical investigation

Article Abstract:

The importance of cash flow information has increased, as many regulatory bodies require firms to include the data as part of their financial reporting. Past studies on the association between cash flows and dividend earnings have produced few substantial results. But new research has re-examined the connection and found a positive relationship between cash flows and dividend changes, given earnings.

Dividends

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Earnings, cash flows and security returns over long return intervals: analysis and UK evidence

Article Abstract:

Empirical evidence shows that cash flow information provides a useful means of valuing security returns over long return intervals. This can be gleaned from the results of an analysis of UK data during the 1985-1992 period, which revealed an improvement in the relative performance of the cash flow parameters when the return interval increased. Furthermore, multivariate cash flow analysis led to higher explanatory power for security returns over long return intervals than a univariate approach. Another significant finding was that adding cash flow variables to earnings resulted in substantial increases in explanatory power.

Cash Management, Accounting and auditing, Profits, Securities, Return on investment, Rate of return, Corporate profits

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