| Title: | Does cash-based operating profitability explain the accruals anomaly in China? | Authors: | Du, Q Wang, Y Wei, KCJ |
Issue Date: | Jun-2020 | Source: | Pacific basin finance journal, June 2020, v. 61, 101336 | Abstract: | We investigate the relations between accruals, operating profitability, cash-based operating profitability, and the cross-section of expected stock returns in U.S. and Chinese markets. By replicating the main results in Ball et al. (2016 JFE), we confirm that cash-based operating profitability subsumes the return predictability of accruals and operating profitability in the U.S. market. Extending to the Chinese market, we similarly find that operating profitability and cash-based profitability can both predict returns but in contrast, operating profitability subsumes cash-based profitability. | Keywords: | Accruals Cash-based operating profitability Operating profitability Return predictability |
Publisher: | Elsevier | Journal: | Pacific basin finance journal | ISSN: | 0927-538X | DOI: | 10.1016/j.pacfin.2020.101336 |
| Appears in Collections: | Journal/Magazine Article |
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