earticle

영어

This paper examines the empirical cross-sectional relationship between cash flow, earnings and market value added for listed firms on the Korea Stock Exchange. It does so because of recent claims that cash flow is a better measures for use by firms in internal planning and control activities than, say earnings. If such is the case then presumably, we would expect that cash flow has a stronger association with market value than, for example, earnings. We conclude that the relationship between cash flow and market value is by no means perfect. Nonetheless, cash flow has a strong association with market value, in conjunction with RD expenditures and opening and closing book value. Also We empirically confirmed that the long-term measures such as the long-term earnings & cash flow types, have a significant impact on MVA. As a consequence, the long-term element of cash flow, earning measures does appear to add explanatory power to equation involving merely earnings, cash flow, RD expenditures and advertisement expenditures. My view, therefore, would be that the evidence presented in the paper provides some support for advocates of the use of cash flow and the long-term measures for planning and control.