We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
The Information Content of Funds Statement Ratios.
- Authors
Barlev, Benzion; Livnat, Joshua
- Abstract
This study examines the incremental information content of funds statement ratios over financial ratios from the income statement and balance sheet. The funds statement ratios are presumed to have incremental information content when the association with security returns is stronger than when only balance sheet and income statement ratios are used. The empirical results indicate that funds statement ratios possess incremental information content. Moreover, funds statement ratios seem to be more highly correlated with security returns than traditional ratios that are based on the balance sheet and income statement. These results are robust to various specifications of the variables. The Financial Accounting Standards Board (FASB) recently issued a statement requiring public firms to present a cash flows statement together with the traditional statements such as the balance sheet and the income statement (FASB [1987]). The new statement will replace the statement of changes in financial position (denoted as the funds statement in the remainder of this study), which has been required by the Accounting Principles Board (APB) since 1971 (AICPA [1971]). This seems to end another controversial area of accounting disclosure, at least for the time being.
- Subjects
FINANCIAL ratios; FINANCIAL statements; CASH flow; ACCOUNTING; BUSINESS records
- Publication
Journal of Accounting, Auditing & Finance, 1990, Vol 5, Issue 3, p411
- ISSN
0148-558X
- Publication type
Article