Value relevance of banks' cash flows from operations

Burke, Qing L.; Wieland, Matthew M.

doi:10.1016/j.adiac.2017.08.002

Cited by 22 publications

(26 citation statements)

References 19 publications

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“…More closely related to ours, a study by Burke and Wieland (2017;henceforth BW) finds that CFO and accruals of US banks are both value relevant. Our paper differs from BW in several key aspects.…”

Section: Prior Literaturesupporting

confidence: 81%

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The informativeness of U.S. banks’ statements of cash flows^✩

Gao

O’Hanlon

2019

Journal of Accounting Literature

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Banks, financial statement users, and accounting standard setters have long disagreed on the informativeness of banks' statements of cash flows (SCFs) and there is a lack of relevant evidence in the literature. This paper examines the informativeness of the SCFs of U.S. commercial banks in two settings where SCFs are purported to be useful. The first analysis tests the incremental value relevance of banks' SCFs beyond income statements and balance sheets and compares bank's SCFs with those of industrial firms. We find that banks' SCFs have limited incremental value relevance, and are much less value relevant than industrial firms' SCFs. The second analysis examines and finds no distress-predictive power of banks' SCFs, especially in the presence of standard distress predictors. Overall, our results are consistent with the view that banks' SCFs have limited informativeness.

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Section: Prior Literaturesupporting

confidence: 81%

“…Our results are qualitatively comparable to those inBurke and Wieland (2017), which show positive and significant coefficients for CFO. However, unlike Burke and Wieland (2017), we do not find that…”

supporting

confidence: 87%

The informativeness of U.S. banks’ statements of cash flows^✩

Gao

O’Hanlon

2019

Journal of Accounting Literature

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“…Banks themselves play down the relevance of their cash flow statement as the information provided herein was not useful in valuing the firm. Burke and Wieland (2017), however, find evidence that the information actually is value-relevant. As we are, however, interested in banks' financial constraint we do not use operating cash flow, but the cash flow from financing activities.…”

Section: Hypothesis Development and Related Literaturementioning

confidence: 88%

“…16 As other studies (e.g. Burke and Wieland (2017)) also notice Compustat only started to collect information from banks' cash flow statements in 2004. 17 Income taxes paid is equal to Compustat item TXPD (data317), income tax expense to TXT (data16), pretax income to PI (data170) and special items to SPI (data17).…”

Section: Sample Selectionmentioning

confidence: 99%

Tax Avoidance - Are Banks Any Different?

Gawehn

Müller

2019

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. AbstractWhile the public has noticed the need for the detection of potential tax loopholes and demand further improvement in the taxation of banks, there is scarce empirical evidence of whether banks' degree of tax avoidance actually differs from that of non-banks. We try to close this gap by investigating U.S. banks' tax avoidance behavior for a sample period from 2004 to 2016. To anchor banks' tax avoidance, we use annual Cash ETRs and GAAP ETRs and compare them to the tax avoidance behavior of non-banks. As there are various channels of tax avoidance, we account for differences in several areas such as corporate fundamentals, the degree of multinationality and regulatory scrutiny. We provide cautious evidence that banks have significantly larger Cash ETRs than non-banks. Via the use of quantile regression we find evidence that the assocation between banks and ETRs is not constant over the whole tax avoidance distribution, but shows a positive association for lower parts of the tax avoidance distribution and a negative association for higher parts. In line with recent research, we provide some evidence that the difference in Cash ETRs between banks and non-banks is more pronounced for worse-capitalized, than for better-capitalized banks.

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“…Dimitropoulos et al (2010) menguji hubungan laba dengan return saham pada 11 lembaga bank di Yunani dan menemukan bahwa arus kas menyediakan relevansi nilai inkremental selain laba. Burke & Wieland (2017) dengan menggunakan data dari tahun 2004-2014, menemukan bukti bahwa arus kas operasi bank dan nilai buku per saham memiliki hubungan positif dengan harga saham. Bhatia & Mulenga (2019) dengan menggunakan objek penelitian perbankan swasta dan publik di India memperoleh hasil EPS dan BVPS secara individu maupun secara bersama-sama berhubungan positif dan signifikan terhadap harga saham.…”

Section: Pendahuluanunclassified

Relevansi Nilai Informasi Akuntansi Pada Laba, Nilai Buku, dan Arus Kas Operasi: Kasus di Perbankan Indonesia

Hadinata

2020

AKTSAR

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<p class="bdabstract">This study aims to examine the relationship between capital markets and accounting information in Indonesian banking. Specifically, this study examines the value relevance of earnings, book values, and operating cash flows. Using a sample of banks listed on the Indonesia Stock Exchange from 2014 to 2018, this study accommodates the documented accounting information in the context of developing markets using stock prices of four months after year-end as a dependent variable. Sampling using a purposive sampling method. This research obtained 35 companies used in this study sample. This study uses panel data regression techniques with the Generalized Least Square (GLS) analysis approach. This study indicates that earnings and book value statistically have a positive effect on stock prices. Meanwhile, operating cash flow has no statistical effect on stock prices. This study also shows that earnings more value-relevant than other variables.</p>

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Value relevance of banks' cash flows from operations

Cited by 22 publications

References 19 publications

The informativeness of U.S. banks’ statements of cash flows^✩

The informativeness of U.S. banks’ statements of cash flows^✩

Tax Avoidance - Are Banks Any Different?

Relevansi Nilai Informasi Akuntansi Pada Laba, Nilai Buku, dan Arus Kas Operasi: Kasus di Perbankan Indonesia

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Value relevance of banks' cash flows from operations

Cited by 22 publications

References 19 publications

The informativeness of U.S. banks’ statements of cash flows✩

The informativeness of U.S. banks’ statements of cash flows✩

Tax Avoidance - Are Banks Any Different?

Relevansi Nilai Informasi Akuntansi Pada Laba, Nilai Buku, dan Arus Kas Operasi: Kasus di Perbankan Indonesia

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Product

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About

The informativeness of U.S. banks’ statements of cash flows^✩

The informativeness of U.S. banks’ statements of cash flows^✩