The Persistence Of Earnings And Earnings Components: Evidence From Algerian Companies (2006-2017)

Résumé

This paper aims to explore whether earnings and earnings components (cash flows and accounting accruals) of Algerian companies are persistent and whether earnings components have different levels of persistence. The research design was based on Sloan’s (1996) model, using a panel data of 20 Algerian companies for the period 2006-2017. The results indicate that earnings, cash flows and accounting accruals of studied Algerian companies are persistent, while the recorded persistence levels are substantially lower than studies in developed countries. On the other hand, previous studies suggested that cash flows are more persistent than accounting accruals, while this study finds that the differential persistence between cash flows and accounting accruals is not substantial.