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Cash Flows or Profitability Measures: Which is Better Stock Return Predictors?
Audit and Accounting Review
View Archive Info| Field | Value | |
| Title |
Cash Flows or Profitability Measures: Which is Better Stock Return Predictors?
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| Creator |
Noor-Ud-Din, Ahmed
Rasheed, Burhan Malik, Zohair Farooq Kazmi, Syed Taha Fraz Haider Shakeel, Amer |
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| Subject |
Stock Returns
CFO CFAF Profitability Predictions |
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| Description |
In this article, we examine the relative ability of cash flows and profitability measures to predict stock returns; whereas, the primary objective of this study is to identify which among the aforementioned predictors have a better stock prediction ability. For this purpose, we used five-year data (from 2014 to 2018) of 50 non-financial firms listed on the Pakistan Stock Exchange. We used cash flow from operations and cash flow after financing activities as cash flow measures and gross profit, operating profit, and earnings per share as profitability measures. The technique of panel regression was used in this study. We found that for stock return predictions, profitability measures provide better prediction results than cash flows. |
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| Publisher |
School of Commerce and Accountancy, University of Management and Technology Lahore, Pakistan
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| Date |
2021-06-30
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion Peer-reviewed Article |
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| Format |
application/pdf
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| Identifier |
https://journals.umt.edu.pk/index.php/aar/article/view/1759
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| Source |
Audit and Accounting Review; Vol 1 No 1 (2021): Spring
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| Language |
eng
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| Relation |
https://journals.umt.edu.pk/index.php/aar/article/view/1759/744
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| Rights |
https://creativecommons.org/licenses/by/4.0
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