The incremental information content of earnings, working capital from operations, and cash flows

Kashi, S.; Hamidian, M.; Baghani, A.

Management Science Letters

ISSN 1923-9343 (Online) - ISSN 1923-9335 (Print) Quarterly Publication Volume 5 Issue 9 pp. 889-894 , 2015

The incremental information content of earnings, working capital from operations, and cash flows Pages 889-894 Download PDF

Authors: Simin Banifatemi Kashi, Mohsen Hamidian, Ali Baghani

DOI: 10.5267/j.msl.2015.6.007

Keywords: Earnings forecast, Profitability, Tehran Stock Exchange

Abstract: This paper presents an empirical study to determine the effects of different factors including present profit, depreciation, working capital, operating cash flow and other accruals on future earnings stability. The study selects the information of 124 selected firms from Tehran Stock Exchange over the period 2006-2012. Using two regression analysis, the study has determined that as the fluctuation of profit increases, the profitability increases too. In addition, the study has concluded that firms with minimum fluctuations preserve more stable profitability. Moreover, firms with higher fluctuation in profitability maintain more volatile profitability for the next consecutive period.

How to cite this paper

 Kashi, S., Hamidian, M & Baghani, A. (2015). The incremental information content of earnings, working capital from operations, and cash flows.Management Science Letters , 5(9), 889-894.

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