Abstract
This paper documents a negative relationship between future stock returns and each of accruals and net operating assets (NOA). While accruals and NOA convey unique information for future returns, NOA appears to have an important moderating influence on the accrual effect. A significant accrual effect is observed amongst stocks with high NOA. In contrast, no accrual effect exists for stocks with low NOA. This finding suggests that high levels of accruals per se are not bad news. An accrual effect only arises for firms that have a sustained track record of not converting accruals into cashflow.
Full Text 
Sign-in/Register to access full text options
Sign-in/Register to access full text options 
Published version (
Free)
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
