The Ability of Earnings to Predict Future Operating Cash Flows Has Been Increasing - Not Decreasing

By Myungsun Kim, William Kross. 2005

326 citations recorded by the source corpus.

Subfields: Accounting, Finance, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/67490e479d8b361e3da1fea288e4d2d234f51748

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Citations in the corpus

Earnings, Cash Flows, and Ex Post Intrinsic Value of Equity (2007, background): “To further buttress our argument, we also reexamine the results of Kim and Kross (2005) and find (results not reported) that the temporal increase in earnings’ correlation with one-period ahead operating cash flows that they document reverses when intrinsic values are used as the predictive…”
A Review of the Value Relevance Literature (2009, methodology): “Kim and Kross [148] use the methodology of Collins, Maydew and Weiss [74] to study how the ability of earnings to predict future cash flow has developed over time.”
Understanding Earnings Quality: A Review of the Proxies, Their Determinants and Their Consequences (2010, unknown): “…al. (1997), Francis and Schipper (1999), Brown et al. (1999), Francis et al. (2002b), Landsman and Maydew (2002), Core et al. (2003), Ryan and Zarowin (2003), Dontoh et al. (2004), Beaver et al. (2005), Kim and Kross (2005), Collins et al. (2007), Jorion et al. (2007), and Dichev and Tang (2008).”
Comparing the Value Relevance, Predictive Value, and Persistence of Other Comprehensive Income and Special Items (2011, background): “Following the predictive value literature, all variables except for stock returns are deflated by average total assets (Sloan 1996; Barth et al. 2001b; Dechow and Dichev 2002; Francis and Smith 2005; Kim and Kross 2005; Richardson et al. 2005; Dechow and Ge 2006).”
Is the decline in the value relevance of accounting driven by increased conservatism? (2011, result): “industry year level consistent with prior research [Kim and Cross (2005)].”
The implications of research on accounting conservatism for accounting standard setting (2015, background): “So, for example, Kim and Kross (2005) find that the predictive value of current earnings for future operating cash flows has improved over time.”
Cash flows and leverage adjustments (2016, background): “Kim and Kross (2005) studied the relationship between earnings and one-year-ahead operating cash flows over the period 1973-2000 and reported that the relationship between current earnings and future operating cash flows had increased over time.”
The usefulness of accounting estimates for predicting cash flows and earnings (2010, unknown): “This result is inconsistent with Kim and Kross (2005) findings that in one-year-ahead predictions of cash flows current earnings performs better than current cash flows.”