Next Article in Journal
Prosperity or Real Estate Bubble? Exuberance Probability Index of Real Housing Prices in Chile
Previous Article in Journal
The Influence of Government Shareholding on Dividend Policy in Malaysia
Article

The Predictive Ability of Quarterly Financial Statements

1
Faculty of Business and Economics, University of Auckland Business School, Auckland 1142, New Zealand
2
Melbourne Business School, University of Melbourne, Melbourne, VIC 3053, Australia
3
Independent Researcher, Melbourne, VIC 3000, Australia
*
Author to whom correspondence should be addressed.
Academic Editor: Sabri Boubaker
Int. J. Financial Stud. 2021, 9(3), 50; https://doi.org/10.3390/ijfs9030050
Received: 7 August 2021 / Revised: 2 September 2021 / Accepted: 6 September 2021 / Published: 15 September 2021
A fundamental role of financial reporting is to provide information useful in forecasting future cash flows. Applying up-to-date time series modelling techniques, this study provides direct evidence on the usefulness of quarterly data in predicting future operating cash flows. Moreover, we show that the predictive gain from using quarterly data is larger for asset-heavy industries and industries with higher levels of earnings smoothness. This study contributes to the accounting literature by examining the usefulness of quarterly financial statements in predicting the realization of future cash flows. Our results help fill the gap in knowledge on quarterly financial statements and provide new insights on why the frequency of financial reporting matters. In addition, our findings have important policy implications for the ongoing debate over interim reporting requirements in multiple jurisdictions around the world. View Full-Text
Keywords: capital market information environment; cash flow forecasting; financial reporting frequency capital market information environment; cash flow forecasting; financial reporting frequency
Show Figures

Figure 1

MDPI and ACS Style

Zhou, H.; Maneesoonthorn, W.O.; Chen, X.B. The Predictive Ability of Quarterly Financial Statements. Int. J. Financial Stud. 2021, 9, 50. https://doi.org/10.3390/ijfs9030050

AMA Style

Zhou H, Maneesoonthorn WO, Chen XB. The Predictive Ability of Quarterly Financial Statements. International Journal of Financial Studies. 2021; 9(3):50. https://doi.org/10.3390/ijfs9030050

Chicago/Turabian Style

Zhou, Hui, Worapree O. Maneesoonthorn, and Xiangjin B. Chen. 2021. "The Predictive Ability of Quarterly Financial Statements" International Journal of Financial Studies 9, no. 3: 50. https://doi.org/10.3390/ijfs9030050

Find Other Styles
Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Article Access Map by Country/Region

1
Back to TopTop