Open AccessThe Association between Various Earnings and Cash Flow Measures of Firm Performance and Stock Returns: some Iranian evidence
Author(s) -
Ali Mazloom,
Alireza Azarberahman,
Jalal Azarberahman
Publication year - 2013
Publication title -
international journal of accounting and financial reporting
Language(s) - English
Resource type - Journals
ISSN - 2162-3082
DOI - 10.5296/ijafr.v3i1.2994
Subject(s) - cash flow , accrual , stock exchange , operating cash flow , stock (firearms) , business , earnings , econometrics , population , empirical research , earnings management , accounting , economics , finance , statistics , mathematics , engineering , mechanical engineering , demography , sociology
The main purpose of this research is the study of association between various measures of firm performance based on earnings and cash flows and stock returns. This research is an applied research, and its design is semi-empirical, which is done by the method of post-event (past information). The statistical population of the research includes all companies listed in Tehran Stock Exchange (TSE), and its period is nine consecutive years, from 2003 to 2011. Simple and multiple regressions are applied in order to test the hypotheses. Results of the research represent that earning based measures are more related to stock returns than cash flow based measures. Furthermore, earning based measures depict the company performance better than cash flow measures in some companies with higher accruals. But in companies with lower accruals, the company performance cannot be depicted properly neither by earning based nor cash flow based measures.