The Relative and Incremental Information Content of Earnings VS. Cash Recovery Rates for Measuring the Company’s Performance

Subject Areas :

Jalil  Khodaparast Shirazi ¹ (استادیار دانشگاه آزاد اسلامی واحد شیراز)
Ghodratallah  Talebnia ² (استادیار دانشگاه آزاد اسلامی واحد علوم و تحقیقات)
Tahereh  Mosallanejad ³ (کارشناس ارشد حسابداری دانشگاه آزاد اسلامس واحد مرودشت)

Received: 2015-05-09 Accepted : 2015-05-09 Published : 2012-08-22

Keywords: Internal Rate of Return, Return on assets, Cash Recovery Rate, Stock Returns, Tobin'Q,

Abstract :

The Content of Earnings have been investigated in many times. Accounting researchers have been looking for measurement which can be used as a competitor against earnings. One of the major competitors against earnings is cash flows. In this study, returns on assets is as proxies for earnings-based measures, and estimated internal rates of return is as proxies for cash recovery-based measures, That their relationship were investigated Tobin'Q and the stock returns, which are both indicators of the company’s performance. The research's method of the present study is based on the correlations. This study was conducted on the companies which were present in Tehran Stock Exchange. The study was done 2005 to 2008. Pearson product moment correlations and multiple regressions were used to test hypotheses. according to the results, it can be concluded that the relative information content of earnings is more than the relative information content of cash recovery rates. and the incremental information content can't be investigated.

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