I examine whether earnings that are smoother or more volatile than cash flows provide or garble information. Consistent with theories that predict more informed trading when public information is less informative, I find that bid-ask spreads and the probability of informed trading are higher both when earnings are smoother than cash flows and also when earnings are more volatile than cash flows...

Constant pressure to increase return on assets has firms seeking ways to reduce their working capital costs. In the cash management area, firms are employing more sophisticated collection and disbursement systems. Cash management systems today efficiently speed up collections and, at the end of the day, sweep excess balances into money market accounts. Cash managers focus on finding the optimal...

Investors use the company value as one of benchmarks in investing capital since is generated from share price with basis performance and public assessment on that performance. The can be measured by Price Earning Ratio (PER), Book Value (PBV), Tobin's Q. selected this research its measurement. subjects were technology-based companies listed Indonesian stock exchange. From data obtained, it was ...

Mortgage-backed securities differ from corporate and government bonds in that their cash flows cannot be estimated with certainty, since homeowners often prepay their mortgages. Prepayments may include sale of the property, refinancing, curtailments, or liquidation of the property due to foreclosure. Standard fixed-income measurements, which allow investors to compare different types of bonds, ...

This paper examines if markets populated by short-horizon investors tend to have the prices come unhooked from their fundamental values or cash flows. For prices to be near the fundamental value in a market populated with short-horizon investors, the investors must induct backward from future cash flows to the present values. We argue that investors’ ability to backward induct depends criticall...

We use China as a laboratory to test the effect of government quality on cash holdings. We build on, and extend, the existing literature on government expropriation and its interaction with firm-level agency problems by proposing a financial constraint mitigation argument. We find that firms hold less cash when local government quality is high, which is not consistent with the state expropriati...

This paper presents an integrated analysis of production and financing decisions. We construct a model in which a cash storage unit is installed to manage the cash flows associated with production activities such as raw material procurement, process operating setup, inventory holding costs and finished product sales. Temporary financial investments are allowed to increase profit. The production...

In these notes, we formally prove that the effort and retention policies that maximize the firm’s profits are independent of realized cash flows. The proof is in two steps. The first step establishes that, in any mechanism that is incentive compatible and sequentially individually rational for the managers, the firm’s expected profits from each manager it hires are given by a formula analogous ...

This article describes the scientific and theoretical basis for forecasting discounted cash flows of Joint-Stock Companies. In this case, theories existing foreign Economist scientists on were analyzed views schools studied. Based results study, a procedure Companies has been developed.