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The usefulness of operating cash flow and accrual components in improving the predictive ability of earnings: a re-examination and extension

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  • Shadi Farshadfar
  • Reza Monem

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  • Shadi Farshadfar & Reza Monem, 2013. "The usefulness of operating cash flow and accrual components in improving the predictive ability of earnings: a re-examination and extension," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 53(4), pages 1061-1082, December.
    • Handle: RePEc:bla:acctfi:v:53:y:2013:i:4:p:1061-1082
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    File URL: http://hdl.handle.net/10.1111/j.1467-629X.2012.00486.x
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    12. Dechow, Patricia M., 1994. "Accounting earnings and cash flows as measures of firm performance : The role of accounting accruals," Journal of Accounting and Economics, Elsevier, vol. 18(1), pages 3-42, July.
    13. Dechow, Patricia M. & Kothari, S. P. & L. Watts, Ross, 1998. "The relation between earnings and cash flows," Journal of Accounting and Economics, Elsevier, vol. 25(2), pages 133-168, May.
    14. Andreas Charitou, 1997. "The role of cash flows and accruals in explaining security returns: evidence for the UK," European Accounting Review, Taylor & Francis Journals, vol. 6(4), pages 629-652.
    15. Gopal V. Krishnan & James A. Largay III, 2000. "The Predictive Ability of Direct Method Cash Flow Information," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 27(1&2), pages 215-245.
    16. Ismail, Badr & Choi, Kwan, 1996. "Determinants of time-series properties of earnings and cash flows," Review of Financial Economics, Elsevier, vol. 5(2), pages 131-145.
    17. Harishankar Balkrishna & Jeffrey J. Coulton & Stephen L. Taylor, 2007. "Accounting losses and earnings conservatism: evidence from Australian Generally Accepted Accounting Principles," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 47(3), pages 381-400, September.
    18. Sati P. Bandyopadhyay & Changling Chen & Alan G. Huang & Ranjini Jha, 2010. "Accounting Conservatism and the Temporal Trends in Current Earnings’ Ability to Predict Future Cash Flows versus Future Earnings: Evidence on the Trade†off between Relevance and Reliability," Contemporary Accounting Research, John Wiley & Sons, vol. 27(2), pages 344-344, June.
    19. Sati P. Bandyopadhyay & Changling Chen & Alan G. Huang & Ranjini Jha, 2010. "Accounting Conservatism and the Temporal Trends in Current Earnings’ Ability to Predict Future Cash Flows versus Future Earnings: Evidence on the Trade†off between Relevance and Reliability," Contemporary Accounting Research, John Wiley & Sons, vol. 27(2), pages 413-460, June.
    20. Nelson, Karen K. & Barth, Mary E. & Cram, Donald, 2001. "Accruals and the Prediction of Future Cash Flows," Research Papers 1594r, Stanford University, Graduate School of Business.
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    Cited by:

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    2. Bradley Blaylock & Bradley P. Lawson & Michael A. Mayberry, 2020. "Taxable income, future profitability, and stock returns," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 47(7-8), pages 858-881, July.
    3. Pütter, Jonas, 2023. "Is Cash (the only) King? – Eine kritische Analyse der Aussagekraft von Kapitalflussrechnungen nach IAS 7 [Is Cash (the only) King? – A critical analysis of the relevance of Cashflow figures accordi," Junior Management Science (JUMS), Junior Management Science e. V., vol. 8(1), pages 219-236.
    4. Oz, Ibrahim Onur & Yelkenci, Tezer & Meral, Gorkem, 2021. "The role of earnings components and machine learning on the revelation of deteriorating firm performance," International Review of Financial Analysis, Elsevier, vol. 77(C).
    5. Sinan Suleiman Abbadi, 2020. "The Moderating Role of Earnings Management on the Relationship between Cash Flow Activities and Stock Returns in the Jordanian Manufacturing Firms," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 1011-1022.
    6. Farshadfar, Shadi & Samarbakhsh, Laleh & Jiang, Yige, 2023. "Financial statement comparability and the usefulness of earnings: Some Canadian evidence," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 52(C).
    7. Xiaomeng Chen & Meiting Lu & Yaowen Shan & Yizhou Zhang, 2021. "Australian evidence on analysts' cash flow forecasts: issuance, accuracy and usefulness," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(1), pages 3-50, March.
    8. Shadi Farshadfar & Reza M. Monem, 2019. "Further evidence of the relationship between accruals and future cash flows," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(1), pages 143-176, March.
    9. Jing Jia & Zhongtian Li, 2022. "Corporate sustainability, earnings persistence and the association between earnings and future cash flows," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(1), pages 299-336, March.
    10. Jiang, Haiyan & Jia, Jing, 2021. "Short selling and future cash flow predictability of capital investment: Evidence from Australia," Journal of Contemporary Accounting and Economics, Elsevier, vol. 17(1).
    11. Kumari, Pooja & Mishra, Chandra Sekhar, 2020. "Value relevance of aggregated and disaggregated earnings in India: Significance of intangible intensity," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 39(C).
    12. Richard Kent & Jacqueline Birt, 2021. "IAS 7 and value relevance: the direct method versus the indirect method," Review of Accounting Studies, Springer, vol. 26(4), pages 1532-1586, December.

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