The Journal of Industrial Distribution & Business (산경연구논집)

Korea Distribution Science Association (한국유통과학회)
권호 표지
DOI QR코드

DOI QR Code

Incremental Information Content of Cash Flow and Earnings in the Iranian Capital Market

  • Asgari, Leila (Department of Accounting, Zanjan Science and Research Branch, Islamic Azad University) ;
  • Salehi, Mahdi (Accounting Department, Ferdowsi University of Mashhad) ;
  • Mohammadi, Ali (Zanjan Branch, Islamic Azad University)
  • Received : 2013.09.04
  • Accepted : 2014.03.17
  • Published : 2014.03.30
Download PDF
⟨ Previous Next ⟩

Abstract

Purpose - This study aims to examine the incremental information content of cash flw from operations and earnings in the Iranian capital market. Design, methodology, and approach - Based on market-based accounting research, this study uses statistical associations between accounting data (earnings and cash flw) and stock returns to assess/measure the incremental information content (value relevance) of cash flw and earnings. A multivariate regression model based on panel data is used to examine the incremental information content of earnings and cash flow from operations. Results - The results show that both earnings and cash flow from operations have incremental information content beyond each other. These results are consistent with the findings of recent studies. Overall, the fidings of this study support the usefulness of cash flw information in addition to earnings, in fim valuation by investors in the Iranian market. Conclusions - The study makes the following contributions to the Iranian literature on incremental information content of cash flw and earnings. First, this study employs actual cash flw data derived from cash flw statements. Second, this study employs a large sample size for a more recent period.

Keywords