Accruals, cash flows and earnings in european privately held firms

  1. Amor Tapia, Borja
  2. Tascón Fernández, María Teresa
Revista:
Pecunia: revista de la Facultad de Ciencias Económicas y Empresariales
  1. Fanjul Suárez, José Luis (coord.)

ISSN: 1699-9495

Año de publicación: 2011

Título del ejemplar: Special Issue on Financial Markets and Corporate Finance

Número: 1

Páginas: 133-156

Tipo: Artículo

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Otras publicaciones en: Pecunia: revista de la Facultad de Ciencias Económicas y Empresariales

Resumen

This paper examines the properties of accruals, cash flows and earnings in European privately held firms. We start from several hypotheses about the persistence of earnings and its components, finding that private companies seem to behave in a different manner than the publicly traded firms tested in previous literature. As hypothesized, differences are significant when accruals are extreme, though in European private firms, persistence of ROA relative to cash flow follows a different pattern than in US public firms. But contrary to our expectations, differences in persistence are not significant when companies report positive versus negative earnings.

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