Interfirm differences in earnings variability: an analysis of fundamentals,cash flows and accruals |
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Authors: | Peter A. Silhan |
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Affiliation: | Department of Accountancy, University of Illinois at Urbana‐Champaign, , Champaign, IL, USA |
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Abstract: | Prior research shows that the time‐series variability of corporate earnings affects forecasting accuracy and corporate risk, yet little is known about the determinants of earnings variability. This study analyses interfirm differences in earnings variability. Large‐sample evidence shows how the ratio of accrual variability to cash‐flow variability varies across a cross‐section of firms and how these components and the correlation between contemporaneous cash flows and accruals are related to key economic fundamentals. |
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Keywords: | Accrual accounting Earnings variability Economic fundamentals |
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