THE INFORMATION CONTENT OF ACCOUNTING ACCRUALS AND CASH FLOWS: EVIDENCE FROM SRI LANKA

Authors

  • A. Lakshman Curtin University
  • C. Sandaruwan University of Sri Jayewardenepura
  • D. Wijesinghe University of Sri Jayewardenepura
  • S. Senaratne University of Sri Jayewardenepura

Abstract

This study examines whether the future earnings persistence of Sri Lankan listed companies depends on the relative magnitudes of cash and accruals components of their current earnings. It also examines whether these different properties of accrual and cash flow components of earnings are reflected in the stock prices of these companies. The results of the study indicate that the extent to which current earnings performance persist in the future of Sri Lankan corporate entities depends on the relative magnitudes of cash and accruals components in current earnings in consistent with the extant literature in this area. However, the stock prices of these companies fail to reflect this relationship.

Keywords: Accruals, Cash Flows, Earnings, Stock Prices

For full Paper: fmscresearch@sjp.ac.lk

Published

2013-08-24

Issue

Vol. 9 (2012): Proceedings of the 9th International Conference on Business Management - 2012

Section

Articles