Earnings versus Cash Flow as a Predictor of Future Cash Flow Measures
- 1 October 1986
- journal article
- review article
- Published by SAGE Publications in Journal of Accounting, Auditing & Finance
- Vol. 1 (4), 266-277
- https://doi.org/10.1177/0148558x8600100402
Abstract
The FASB has asserted, without proof, that information about an enterprise's earnings based on accrual accounting generally provides a better indication of a company's ability to generate favorable cash flows than information about cash flows themselves. This study tests that assertion, empirically. The test results provide empirical evidence supporting the FASB's contention.Keywords
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