Earnings, cash flows and security returns over long return intervals: Analysis and UK evidence

Abstract

This study develops insights from Ohlson (1995), Easton et al. (1992) and Lawson (1981) to provide a theoretical basis for empirical analysis of the relationship between security returns and cash flow over long return intervals. More specifically, this theoretical framework provides the rationale for a multivariate analysis of the information content of cash flows over long return intervals. In addition, we consider the usefulness of examining the incremental information content of accounting earnings and cash flows over long return intervals. © Blackwell Publishers Ltd 1999.