Interfirm differences in earnings variability: An analysis of fundamentals, cash flows and accruals

Research output: Contribution to journalArticle

Abstract

Prior research shows that the time-series variability of corporate earnings affects forecasting accuracy and corporate risk, yet little is known about the determinants of earnings variability. This study analyses interfirm differences in earnings variability. Large-sample evidence shows how the ratio of accrual variability to cash-flow variability varies across a cross-section of firms and how these components and the correlation between contemporaneous cash flows and accruals are related to key economic fundamentals.

Original languageEnglish (US)
Pages (from-to)1357-1379
Number of pages23
JournalAccounting and Finance
Volume54
Issue number4
DOIs
StatePublished - Dec 1 2014

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Cash flow
Accruals
Economic fundamentals
Contemporaneous correlation
Cross section
Forecasting accuracy

Keywords

  • Accrual accounting
  • Earnings variability
  • Economic fundamentals

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics, Econometrics and Finance (miscellaneous)

Cite this

Interfirm differences in earnings variability : An analysis of fundamentals, cash flows and accruals. / Silhan, Peter A.

In: Accounting and Finance, Vol. 54, No. 4, 01.12.2014, p. 1357-1379.

Research output: Contribution to journalArticle

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