Earnings, accruals, cash flows, and EBITDA for agribusiness firms

Carlos Omar Trejo-Pech, Richard N. Weldon and Lisa A. House

Agricultural Finance Review, 2008, vol. 68, issue 2, pages 301-319

Abstract: This study examines empirical relationships of earnings, accruals, and cash flows for the U.S. food supply chain sector (i.e., agribusiness) and compares them with results for the complete U.S. market. In addition, we evaluate earnings before interest, taxes, depreciation, and amortization (EBITDA) as a potential proxy for cash flow. Empirical results show that while earnings and accruals are systematically positively related, accruals and cash flows are systematically negatively related. Moreover, both the magnitude and the behavior of EBITDA across different levels of cash flows for agribusinesses do not mimic cash flows. Thus, this metric is not a valid proxy for cash flow in accrual research studies.

Keywords: Accruals; Agribusiness; Cash flows; Earnings; EBITDA; Financial accounting (search for similar items in EconPapers)
Date: 2008

Downloads: (external link)
http://www.emeraldinsight.com/Insight/viewContentI ... le&contentId=1784632 (text/html)
Cannot be freely downloaded

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:eme:afrpps:v:68:y:2008:i:2:p:301-319

Ordering information: This journal article can be ordered from
Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
http://www.emeraldinsight.com/afr.htm

Access Statistics for this article

Agricultural Finance Review is edited by Professor Calum G. Turvey

More articles in Agricultural Finance Review from Emerald Group Publishing
Series data maintained by Rebecca Forster ().