Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Measuring Accruals: Sloan (1996)
⚫Sloan’s definition of accruals:
Accruals
= (DCurrent Assets –DCash) - (DCurrent Liabilities –DST Debt) –
Depreciation Expense
Note that: Earnings - Cash from Operations = Accruals
Deflate by total assets
Accounting Rates of Return and
Earnings: Sloan (1996)
Accounting Rates of Return and
Accruals: Sloan (1996)
Accounting Rates of Return and
Cash Flows: Sloan (1996)
Future Stock Returns and Accruals:
Sloan (1996)
Concluding Comments
⚫Quality of earnings analysis yields significant
insights into the sustainability of earnings, and
these insights do not appear to be incorporated
into stock prices on a timely basis.
