Trade credit represents a substantial portion of short-term credit for most firms. A trade credit decision is usually limited to a comparison of the effective cost of trade credit with the annual cost of borrowing. If the cost of not taking the cash discount exceeds the firm’s borrowing cost, the decision is to take the cash discount. This article examines traditional trade credit analysis, and...

In this thesis, I provide new insights in the field of asset pricing and portfolio optimization by investigating the role of information and factor decompositions. In particular, I investigate the effect of disentangling specific risk factors as used in the earlier asset pricing and portfolio allocation literature into their different sub-components. In Chapter 2, I propose an extension to the ...

Using a new variable based on a model of dividend smoothing, we find dividend growth is highly predictable and cash flow news contributes importantly to return variability. Cash flow betas derived from this predictability are central to explaining the size effect in the cross section of returns. However, they do not explain the value effect; this is explained by noise betas. We also find that t...

This paper examines whether the firm-level accrual and cash flow effects extend to the aggregate stock market. In sharp contrast to previous firm-level findings, aggregate accruals is a strong positive time series predictor of aggregate stock returns, and cash flows is a negative predictor. In addition, innovations in accruals are negatively contemporaneously correlated with aggregate returns, ...

In recent years, members of Congress and academia have repeatedly urged the U.S. Treasury to issue some portion of its debt in the form of inflation indexed bonds. With an indexed bond, the interest and maturity value are adjusted by the rate of inflation over the life of the bond. Because the cash flow of an indexed bond is adjusted for inflation, the bond’s real value does not vary with infla...

However, the free cash flows scale is important for the financial health of the company, but it has also its own limitations. Moreover, it’s not immune from accounting tricks. Free cash flows can be considered as a measure of value for shareholders of listed companies on Tehran Stock Exchange. The managers of these companies have tended to use the earnings management for managing the free cash ...

journal of accounting advances (j.a.a) vol. 5, no. 1, 2013, ser. 64/3     extended abstract   monitoring role of auditing and corporate dividend payout policies   dr. v. khodadadi              s. hajizadeh               r. ghorbani shahid chamran university of ahvaz   introduction the aim of this paper is to investigate the relation between monitoring role of independent auditing and corporate ...

The main purpose of this research is to evaluate the role of the company life cycle in providing an appropriate model in predicting the quality of discretionary accruals (Abnormal) using the Dickinson Cash Flow Model approach. The statistical population of the research consisted of 180 company observations that were divided into three stages of life cycle using Dickinson's model variables (2011...

The decision to select one of the two accounting methods for inventory valuation – first-in, first-out (FIFO) and last-in, first-out (LIFO) – involves consideration of several factors of which potential tax effect of the accounting method is often the most important. While the general relationships of inflation, inventory levels, rate of taxation, etc., to the potential tax savings have been we...