Comprehensive Review of Predictability Power and Informational Content of Income Statement and Balance Sheet Variables for Future Cash Flow

Document Type : Original Article

Authors

10.22034/iaar.2014.104341

Abstract

In this paper predictability power of four variables (accrual, cash flow, earning, and net operating assets) is tested.. The study is at firm level in Tehran Stock Exchange using the data of 153 firms for 7 years ( 1382- 1389). In addition to, we run multivariate regression to test incremental information content of the four variables. We found evidence of accrual reversal phenomena in our sample. Also, we observed that predictability power of operating power is bigger than other variables. At last, we documented that among the variables, only operating earning has incremental information content. 

Keywords

Accounting and Auditing Research
Volume 6, Issue 23
October 2014
Pages 88-101

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