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Dechow, Patricia - 2011

This paper provides a practitioner-oriented review of the accrual anomaly in Sloan (1996) and related subsequent research. We begin with two simple examples that illustrate the computation and interpretation of accruals. We next review Sloan's (1996) original paper and related subsequent...

Persistent link: https://www.econbiz.de/10013128072

Detecting Earnings Management : A New Approach

Dechow, Patricia - 2011

property of accrual accounting that any accrual-based earnings management in one period must reverse in another period. If the …

Persistent link: https://www.econbiz.de/10013131824

Non-Discretionary Conservatism : Evidence and Implications

Lawrence, Alastair - 2014

A large body of accounting research finds that various contracting incentives lead managers to engage in conservative … accounting practices. We extend existing research by modeling the impact of extant accounting rules on conservative accounting …. Accounting rules typically require assets to be written down when their fair values drop sufficiently below their book values. We …

Persistent link: https://www.econbiz.de/10013066500

What Makes Stock Prices Move? Fundamentals vs. Investor Recognition

Richardson, Scott A. - 2014

We synthesize and extend recent research demonstrating that investor recognition is a distinct and significant determinant of stock price movements. Realized stock returns are strongly positively related to changes in investor recognition and expected returns are strongly negatively related to...

Persistent link: https://www.econbiz.de/10013068584

Accrual Reversals, Earnings and Stock Returns

Allen, Eric J. - 2015

We document pervasive evidence of reversals in firm-level working capital accruals over adjacent fiscal years. We demonstrate that the majority of these accrual reversals relate to ‘good' accruals that: (i) correctly anticipate future benefits; (ii) lead to higher earnings persistence; and (iii)...

Persistent link: https://www.econbiz.de/10013039311

Short Interests, Fundamental Analysis, and Stock Returns

Dechow, Patricia - 2008

Firms with low ratios of fundamentals (such as earnings and book values) to market values are known to have systematically lower future stock returns. We document that short-sellers position themselves in the stock of such firms, and then cover their positions as the ratios revert to normal...

Persistent link: https://www.econbiz.de/10012728343

The Persistence and Pricing of the Cash Component of Earnings

Dechow, Patricia - 2007

Prior research shows that the cash component of earnings is more persistent than the accrual component of earnings. We investigate whether the persistence of the cash component is influenced by management's decision to retain or distribute cash flows. We find that when firms retain the cash...

Persistent link: https://www.econbiz.de/10012732186

Balance Sheet Information and Future Stock Returns

Richardson, Scott A. - 2006

Numerous studies have documented that the most recent annual change in net operating assets is negatively related to future stock returns. In recent work, Hirshleifer, Hou, Teoh and Zhang (2004) show that the level of net operating assets scaled by the previous year's total assets is also...

Persistent link: https://www.econbiz.de/10012733220

The Implications of Accounting Distortions and Growth for Accruals and Profitability

Richardson, Scott A. - 2005

that is attributable to the widespread use of conservative accounting methods and/or diminishing marginal returns to new …

Persistent link: https://www.econbiz.de/10012737414

The Relation between Corporate Financing Activities, Analysts' Forecasts and Stock Returns

Bradshaw, Mark T - 2006

We develop a comprehensive and parsimonious measure of corporate financing activities and document a negative relation between this measure and both future stock returns and future profitability. The economic and statistical significance of the results using our comprehensive measure of external...

Persistent link: https://www.econbiz.de/10012780049