The Value-Relevance of Cash Flows and Accruals: The Role of Investment Opportunities

2008 ◽  
Vol 83 (4) ◽  
pp. 997-1040 ◽  
Author(s):  
Krishna R. Kumar ◽  
Gopal V. Krishnan
Keyword(s):  
Important Determinant ◽  
Value Relevance ◽  
Cash Flows ◽  
External Financing ◽  
Investment Opportunity ◽  
Accounting Measurement ◽  
Investment Opportunities ◽  
High Investment ◽  
Cost Differentials

ABSTRACT: We examine the role of investment opportunities as a determinant of the relative importance of cash flows from operations (CFO) and accruals in firm valuation. We find that at low investment-opportunity levels, CFO value-relevance increases with investment opportunities. When investment opportunities are high, accrual value-relevance declines as investment opportunities increase. Consequently, earnings value-relevance first varies directly and then inversely with investment opportunities. We show that the increase in CFO value-relevance is consistent with cost differentials between internal and external financing causing CFO to be an increasingly important determinant of the realization of investment opportunities. The decline in accrual value-relevance at high investment-opportunity levels appears to be attributable to accounting measurement deficiencies.

scholarly journals Pengaruh Asimetri Informasi Pada Kebijakan Dividen Dengan Investment Opportunity Set Sebagai Variabel Pemoderasi

2018 ◽  
pp. 2040
Author(s):  
Ni Putu Linda Yasmita ◽  
Anak Agung Gde Putu Widanaputra
Keyword(s):  
Information Asymmetry ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Investment Opportunity ◽  
Dividend Payout ◽  
Asymmetry Of Information ◽  
Investment Opportunity Set ◽  
Investment Opportunities ◽  
High Investment ◽  
A Company

The purpose of this study is to obtain empirical evidence of investment opportunity capability sets to moderate the influence of information asymmetry on dividend policy. This research was conducted at a manufacturing company listed on Indonesia Stock Exchange 2014-2016. Sampling method used is purposive sampling. The sample size is 30 with 72 observations. Technique Data analysis used is test of Moderated Regression Analysis (MRA). Based on the results of the analysis, it is known that the investment opportunity set is not as a moderator of the influence of information asymmetry on the dividend policy. This suggests that when firms have high investment opportunities with high levels of asymmetry, it is not necessarily that the company will pay low dividends or not share them to the shareholders, since management will manage earnings annually as reserves to be reinvested without reducing the proportion of dividend payout to investors. This study provides implications for investors as a consideration in investing in a company to see how the bid ask and dividend payout ratio of the company's shares. Keywords: asymmetry of information, investment opportunity set, dividend policy

scholarly journals Excess cash holdings, investment opportunity and shareholder value: European evidences

2016 ◽  
Vol 14 (1) ◽  
pp. 630-639 ◽  
Author(s):  
Simone Terzani ◽  
Giovanni Liberatore
Keyword(s):  
Financial Constraints ◽  
Shareholder Value ◽  
Cash Holdings ◽  
Investment Opportunity ◽  
Ceteris Paribus ◽  
Marginal Value ◽  
Investment Opportunities ◽  
High Investment ◽  
Precautionary Motive ◽  
Excess Cash

In this paper, we examine the marginal value of extra liquidity for a sample of excess cash listed companies (i.e. ECs) operating in the five largest E.U. economies (France, Italy, Germany, Spain and UK). After had shown that these companies are generally penalised by the market, in line with previous literature, we show that extra cash held is not detrimental to shareholder value when it is combined with high investment opportunities leading, hence, in a premium of 1€ extra held. This relation is even stronger during the financial crisis of 2008. These results confirm that the main reason why ECs are generally valued less by the market is the concern that their managers may deploy excess cash in value-destroying activities. However, EC firms are not penalized ceteris paribus when there are investment opportunities. In addition, such relation is stronger with the presence of financial constraints and lack of liquidity, as explained by the transaction and precautionary motive for holding cash.

scholarly journals Implications of Cash Flows and Investment Opportunity for Investment Decisions in Fixed Assets on Financially Constrained Companies

2020 ◽  
Vol 8 (1) ◽  
pp. 69-75
Author(s):  
Citra Veronisa
Keyword(s):  
Cash Flow ◽  
Financial Constraints ◽  
Stock Exchange ◽  
Investment Decisions ◽  
Cash Flows ◽  
Investment Opportunity ◽  
Fixed Assets ◽  
Investment Opportunities ◽  
Conceptual Paper ◽  
Intervening Variables

This research is a conceptual paper that aims to determine the effect of cash flow and investment opportunity for investment decisions in fixed assets on financially constrained companies. This type of research is explanatory research with companies in the property and real estate sectors listed on the Indonesia Stock Exchange in 2016-2018 as a population.This research will be conducted to predict how much the level of investment decisions is influenced by cash flow and investment opportunities with financial constraints as intervening variables. Based on previous research, shows differences in research results, so the authors aim to see the results of research on companies in Indonesia with different conditions and measurement variables.

scholarly journals The Role of Managerial Ability in Firm Investment Opportunities and Performance of Non Financial Firms, A Mediating Role of Corporate Governance

2020 ◽  
Vol V (I) ◽  
pp. 309-324
Author(s):  
Kamran Nawaz ◽  
Farzand Ali Jan ◽  
Syed Kashif Shah
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Cash Holdings ◽  
Investment Opportunity ◽  
Firm Investment ◽  
Managerial Ability ◽  
Independent Variables ◽  
Financial Firms ◽  
Investment Opportunities

The current study focused on investigating the influence of management ability on the investment opportunity and firm performance. The managerial ability has a strategic impact on firm performance and value. Secondary data was employed. The study takes 369 non-financial firms as a population of the study and 196 firms as sample size selected randomly. The data was collected from 2008 to 2017. The managerial ability, cash holdings and dividend payout have a significant effect on the firm performance (ROA). Corporate governance has significant effects on the independent variables and ROA. The findings suggested that managerial ability, cash holdings and dividend payout have significant effects on firm investment opportunities (total Q). Corporate governance has positive and significant effects among independent variables and total Q (TTQ). It has been recommended that managers with superior abilities correlate themselves with a better investment opportunity.

scholarly journals An International Review to Characterize the Role, Responsibilities, and Optimal Setting for Health Literacy Mediators

2021 ◽  
Vol 8 ◽  
pp. 2333794X2110254
Author(s):  
Madeline Spencer ◽  
Nenagh Kemp ◽  
Vaughan Cruickshank ◽  
Claire Otten ◽  
Rosie Nash
Keyword(s):  
Health Literacy ◽  
Literacy Development ◽  
Recent Literature ◽  
Important Determinant ◽  
Literacy Education ◽  
International Review ◽  
Optimal Setting ◽  
Role Responsibilities ◽  
The Life Course

Health literacy is a critically important determinant of health and is influenced by access to supportive social networks and services. Global investment in education throughout the life course is required to support health literacy development. The aim of this review is to characterize the role, responsibilities, and the optimal setting for the emergent role of a Health Literacy Mediator (HLM). A scoping review of recent literature was conducted. The review revealed a lack of consensus on who should be teaching health literacy, and variability in confidence when teaching health literacy. Professionals reported facing barriers such as a lack of time, a lack of knowledge, and recognized that the health literacy needs of children worldwide are not being met. Further research into the role of HLM is required to determine who is best suited to this role and what their responsibilities will be to ensure consistent health literacy education.

scholarly journals Solidarity with disabled people in times of crisis: A comparative analysis of Italy and the UK

2021 ◽  
pp. 026858092199450
Author(s):  
Nicola Maggini ◽  
Tom Montgomery ◽  
Simone Baglioni
Keyword(s):  
Social Trust ◽  
Important Determinant ◽  
Social Embeddedness ◽  
Disabled People ◽  
The Social ◽  
Religious Piety ◽  
Active Nature ◽  
The One ◽  
The Uk

Against the background of crisis and cuts, citizens can express solidarity with groups in various ways. Using novel survey data this article explores the attitudes and behaviours of citizens in their expressions of solidarity with disabled people and in doing so illuminates the differences and similarities across two European contexts: Italy and the UK. The findings reveal pools of solidarity with disabled people across both countries that have on the one hand similar foundations such as the social embeddedness and social trust of citizens, while on the other hand contain some differences, such as the more direct and active nature of solidarity in Italy compared to the UK and the role of religiosity as an important determinant, particularly in Italy. Across both countries the role of ‘deservingness’ was key to understanding solidarity, and the study’s conclusions raise questions about a solidarity embedded by a degree of paternalism and even religious piety.

Neurofilament phosphorylation

1995 ◽  
Vol 73 (9-10) ◽  
pp. 575-592 ◽  
Author(s):  
Harish C. Pant ◽  
Veeranna
Keyword(s):  
Molecular Weight ◽  
Nervous System ◽  
Nervous Tissue ◽  
Important Determinant ◽  
Neurofilament Proteins ◽  
Neurofilament Phosphorylation ◽  
Axonal Compartment

Neurofilament proteins (NFPs) are highly phosphorylated molecules in the axonal compartment of the adult nervous system. The phosphorylation of NFP is considered an important determinant of filament caliber, plasticity, and stability. This process reflects the function of NFs during the lifetime of a neuron from differentiation in the embryo through long-term activity in the adult until aging and environmental insult leads to pathology and ultimately death. NF function is modulated by phosphorylation–dephosphorylation in each of these diverse neuronal states. In this review, we have summarized some of these properties of NFP in adult nervous tissue, mostly from work in our own laboratory. Identification of sites phosphorylated in vivo in high molecular weight NFP (NF-H) and properties of NF-associated and neural-specific kinases phosphorylating specific sites in NFP are described. A model to explain the role of NF phosphorylation in determining filament caliber, plasticity, and stability is proposed.Key words: neurofilament proteins, phosphorylation, kinases, phosphatases, regulators, inhibitors, multimesic complex, domains.

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