A comparative study of information content of cash flow, cash value added, accounting earnings, and market value added to book value of total assets in evaluating the firm performance

  • Authors

    • Mohammad Delkhosh Islamic Azad University, Bardaskan
    • Zahra Malek
    • Maryam Rahimi
    • Zohreh Farokhi
    2017-07-18
    https://doi.org/10.14419/ijaes.v5i2.7987
  • Cash Value Added, Market Value Added, Net Cash Flows, Net Operating Cash Flows, Valued Added, Tobin’s Q Ratio.

  • Abstract

    The aim of the present study was to compare the utility of traditional accounting reporting and financial reporting for performance evaluations. Accordingly, the relationship between six ratios of net cash flows, net operating cash flows, cash value added, income after tax, income before tax, and market value added to the book value of total assets and Tobin’s Q ratio as an indicator of performance evaluation were examined. For this purpose, the information of 122 companies listed on Tehran Stock Exchange in the years 2009 to 2014 were used. Besides, linear regression and analysis of variance (ANOVA) were used to analyze the data. The results showed that except for the ratio of net cash flows to the book value of total assets, there was a significant relationship between the other five ratios. In addition, it was noted that cash value added to net operating cash flows had more information content concerning evaluating the firm performance. The results also indicated that net cash flows did not contain information content for evaluating the firm performance. However, the market value added had the maximum information to be used for evaluating the firm performance.

  • References

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  • How to Cite

    Delkhosh, M., Malek, Z., Rahimi, M., & Farokhi, Z. (2017). A comparative study of information content of cash flow, cash value added, accounting earnings, and market value added to book value of total assets in evaluating the firm performance. International Journal of Accounting and Economics Studies, 5(2), 112-117. https://doi.org/10.14419/ijaes.v5i2.7987

    Received date: 2017-06-14

    Accepted date: 2017-07-07

    Published date: 2017-07-18