 The impact of accruals and cash flows on the returns-earnings relation: evidence from GreecePanagiotis E. Dimitropoulos and Dimitrios Asteriou International Journal of Accounting, Auditing and Performance Evaluation, 2009, vol. 5, issue 4, 384-407 Abstract: This paper aims at examining the impact of earnings and cash flows relevance on stock return movements within the Greek capital market from 1996 to 2004. Results indicated that earnings have higher incremental importance in explaining stock return movements compared with cash flows as earnings have been found to affect stock returns positively. Additionally, tests on the incremental informativeness of cash flows when earnings are transitory did provide significant results suggesting that investors seek for alternative measures of firms' performance when earnings are characterised by increased extremity. Moreover, cash flows and earnings seem to be equally value relevant when investors evaluate big-sized firms but on the contrary, cash flows are highly valued for firms with increased growth opportunities. Finally, the empirical findings with respect to the effect of leverage on the informational content of earnings and cash flows, provides support to the hypothesis that earnings become less value relevant for high leveraged firms. Keywords: accruals; cash flows; accounting earnings; Greece; transitory earnings; value relevance; stock return movements; capital market. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ids:ijaape:v:5:y:2009:i:4:p:384-407 Access Statistics for this article More articles in International Journal of Accounting, Auditing and Performance Evaluation from Inderscience Enterprises Ltd |
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