EARNINGS AND CASH FLOW PERSISTENCE – CASE OF MEDIUM AGRICULTURE ENTERPRISES IN SERBIA
DOI:
https://doi.org/10.5937/ekoPolj2101141SKeywords:
Persistence, earnings quality, agriculture. medium-sized enterprises, SerbiaAbstract
This paper examines the earnings and cash flow persistence of selected agriculture Serbian enterprises as a measure of their earnings quality. We study the persistence of income statements and cash flow statement items of medium-sized agriculture enterprises in Serbia. Agriculture is a relevant sector for the national economy and medium-sized enterprises are the main drivers of her economic growth. We use panel regression analysis with annual data over the period from 2010 to 2018. The results of our research indicate that earnings and cash flow-based indicators have different persistence. Analysing accruals and net cash flows of operating activities as determinants of operating profit of analysed enterprises, we conclude that operating profit that represents accruals are more persistent than operating profit backed by net operating cash flows.
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References
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21. Stevanović, S., Belopavlović, G., & Lazarević-Moravčević, M. (2013). Creative Cash Flow Reporting–the Motivation and Opportunities. Economic Analysis, 46(1-2), 28-39.
2. Boulton, T. J., Smart, S. B., & Zutter, C. J. (2011). Earnings quality and international IPO underpricing. The Accounting Review, 86(2), 483-505. doi.org/10.2308/accr.00000018
3. Dasmaran, V., & Mulyani, S. D. (2019). The Effect of Environmental Accounting Implementation, Research and Development to Earnings Quality and Ethics as to Moderating Variables. Research Journal of Finance and Accounting, 10(24), 159-167.
4. Dechow, P. M., & Schrand, C. M. (2004). Earnings quality, Monograph, Research Foundation of CFA Institute, 1-3927.
5. Dechow, P., Ge, W., & Schrand, C. (2010). Understanding earnings quality: A review of the proxies, their determinants, and their consequences. Journal of accounting and economics, 50(2-3), 344-401. doi.org/10.1016/j.jacceco.2010.09.001
6. Demerjian, P. R., Lev, B., Lewis, M. F., & McVay, S. E. (2013). Managerial ability and earnings quality. The Accounting Review, 88(2), 463-498. doi.org/10.2308/accr-50318
7. Đuričin, S., Beraha, I., & Bodroža, D. (2018). Alternatives for existing the loss zone for medium-sized agricultural enterprises in the Republic of Serbia. Economics of Agriculture, 65(1), 391-411.
8. Đuričin, S., Stevanović, S., Ljumović, I., & Simović, V. (2019). National network of medium enterprises in the Republic of Serbia. Belgrade: Institute of Economic Sciences, Retrieved from https://www.library.ien.bg.ac.rs/index.php/nmsp/article/view/532/1059. [in Serbian: Ђуричин, С., Стевановић, С., Љумовић, И., & Симовић, В. (2019). Национална мрежа средњих предузећа у Републици Србији].
9. Francis, J., Nanda, D., & Olsson, P. (2008). Voluntary disclosure, earnings quality, and cost of capital. Journal of accounting research, 46(1), 53-99. doi.org/10.1111/j.1475-679X.2008.00267.x
10. Huq, A. M. (2016). Effect of earnings volatility on cost of debt: the case of Swedish limited companies. Dalarna University, Masters in Business Studies, Retrieved from https://www.diva-portal.org/smash/get/diva2:937817/FULLTEXT01.pdf
11. Meeampol, S., Rodpetch, V., Srinammuang, P., & Wongsorntham, A. (2013). Relationship between corporate governance and earnings quality: case study of listed companies in the Thailand Stock Exchange. In Active Citizenship by Knowledge Management & Innovation: Proceedings of the Management, Knowledge and Learning International Conference 2013, pp. 1345-1353.
12. Milić, D., Mijić, K., Jakšić, D. (2018). Opportunistic management behavior in reporting earnings of agricultural companies. CUSTOS E AGRONEGOCIO ON LINE, 14(1), 125-142.
13. Mulford, C., & Comiskey, E. (2005). Creative Cash Flow Reporting: Uncovering Sustainable Financial Performance, New Jersey: John Wiley & Sons, Inc. Hoboken.
14. Nuris, D. M. R., & Juliardi, D. (2017). The Effect of Auditor Switch Toward the Firm Value And Earning Persistance, Retrieved from https://osf.io/preprints/inarxiv/5mhu7/
15. Pagalung, G., & Sudibdyo, B. (2018). The determinant factors of earnings quality and economic consequences. EKUITAS (Jurnal Ekonomi dan Keuangan), 16(1), 105-122. doi.org/10.24034/j25485024.y2012.v16.i1.150
16. Perotti, P., & Wagenhofer, A. (2014). Earnings quality measures and excess returns. Journal of Business Finance & Accounting, 41(5-6), 545-571. doi.org/10.1111/jbfa.12071
17. SBRA - Serbian Business Registers Agency (2019). The Financial Statements Annual Bulletin, Retrieved from https://www.apr.gov.rs/upload/documents/Bilten%202019.pdf. [in Serbian: АПР-Агенција за привредне регистрe (2019). Годишњи билтен финансијских извештаја].
18. SBRA - Serbian Business Registers Agency, The Register of Financial Statements, Retrieved from http://www.apr.gov.rs (February 25, 2020). [in Serbian: АПР-Агенција за привредне регистрe. Регистар финансијских извештаја].
19. Srivastava, A. (2014). Why have measures of earnings quality changed over time? Journal of Accounting and Economics, 57(2-3), 196-217. doi.org/10.1016/j.jacceco.2014.04.001
20. Stevanović, S., & Marinković, G. (2017). Impact of sales revenue quality on the earning quality: evidence from Serbian enterprises. In Thematic Monograph: Opportunities for inclusive and resilient growth, Belgrade: Institute of Economic Sciences, pp. 105-116. [in Serbian: Стевановић, С., & Маринковић, Г. (2017). Утицај квалитета прихода од продаје на квалитет добитка: пример предузећа у Србији].
21. Stevanović, S., Belopavlović, G., & Lazarević-Moravčević, M. (2013). Creative Cash Flow Reporting–the Motivation and Opportunities. Economic Analysis, 46(1-2), 28-39.
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Published
2021-03-25
How to Cite
Stevanović, S. M., Minović, J. Z., & Marinković, G. M. (2021). EARNINGS AND CASH FLOW PERSISTENCE – CASE OF MEDIUM AGRICULTURE ENTERPRISES IN SERBIA. Ekonomika Poljoprivrede, 68(1), 141–153. https://doi.org/10.5937/ekoPolj2101141S
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