Academic Evidence

Investors are always seeking to unravel the drivers that underlie equity price and stock performance. Several models have been developed over time trying to solve the puzzle. The Capital Asset…

Investors have long sought to identify reliable predictors of stock returns to maximize their investment performance. One area of interest has been the role of accounting measures such as accruals,…

In contrast to cash flow, the growth in long-term net operating assets and accruals display a lower degree of persistence in their capacity to gauge future earnings performance. This disparity…

The argument over which metric, cash flows or earnings, better predict profitability has been ongoing for years. A recent study by Foerster, Tsagarelis, and Wang, looked at the mixed evidence…