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dc.contributor.authorRapp, Marc Steffenen_US
dc.description.abstractWhile some of the modern performance measures used in managerial accounting rely on cash flow based figures others try to take advantage of the information content of accounting figures. However, whether the additional information content in the accrual components of earnings improves the internal performance measurement is an open empirical question. To shed light on this question, I examine the correlation between operating cash flows and earnings with firm's total shareholder returns. Using fixed firm effects regression methods for a large sample of German listed firms covering some 5,000 firm years, the analysis shows that generally operating cash flow and earnings are both positively correlated with total shareholder return. However, with increasing information asymmetry earnings become less correlated with the firm's stock market performance and operating cash flows dominate earnings in explaining total shareholder return (and vice versa). These results suggest that, the information content of accounting figures is only relevant in settings characterized by low information asymmetries and, thus, there is no one-size-fits-all performance measure for managerial accounting purposes.en_US
dc.publisher|aCenter for Entrepreneurial and Financial Studies (CEFS) |cMunichen_US
dc.relation.ispartofseries|aCEFS working paper series |x2010-08en_US
dc.subject.keywordaccounting figuresen_US
dc.subject.keywordperformance measuresen_US
dc.subject.keywordtotal shareholder returnen_US
dc.subject.keywordmanagerial accountingen_US
dc.subject.stwBetriebliche Kennzahlen_US
dc.subject.stwShareholder Valueen_US
dc.subject.stwAsymmetrische Informationen_US
dc.titleInformation asymmetries and the value-relevance of cash flow and accounting figures: empirical analysis and implications for managerial accountingen_US
dc.typeWorking Paperen_US

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