Table III Earnings quality across...

Table III

Earnings quality across different groups of companies

Year	Variable	Listed companies	Large private companies	Medium companies	Small companies	Micro companies
All years	No. of firm-years	6,318	13,067	20,630	256,562	217,647
	V(ΔNI)	0.0170	0.0027	0.0035	0.1132	0.1707
	SD, mean of bootstrap distribn	(1.27E-04, 0.0169)	(1.04E-06, 0.0027)	(1.05E-06, 0.0035)	(1.39E-04, 0.1132)	(2.09E-04, 0.1707)
	V(ΔNI)/V(ΔCF)	0.3313	0.0587	0.0695	0.2485	0.2231
	SD, mean of bootstrap distribn	(3.74-E03, 0.3314)	(3.82E-04, 0.0587)	(3.33E-04, 0.0696)	(4.43E-04, 0.2486)	(4.18E-04, 0.2230)
2006	No. of firms	768	1,367	1,970	34,087	38,136
	V(ΔNI)/V(ΔCF)	0.3199	0.0589	0.0783	0.2474	0.2325
2007	No. of firms	780	1,442	2,180	33,642	39,508
	V(ΔNI)/V(ΔCF)	0.3979	0.0579	0.0715	0.2519	0.2285
2008	No. of firms	780	1,575	2,249	32,945	40,240
	V(ΔNI)/V(ΔCF)	0.3857	0.0771	0.0851	0.2461	0.2266
2009	No. of firms	805	1,611	2,608	32,045	33,629
	V(ΔNI)/V(ΔCF)	0.3620	0.0606	0.0802	0.2500	0.2088
2010	No. of firms	790	1,733	2,842	31,662	18,114
	V(ΔNI)/V(ΔCF)	0.2088	0.0417	0.0549	0.2497	0.2198
2011	No. of firms	807	1,744	2,984	30,941	19,686
	V(ΔNI)/V(ΔCF)	0.3935	0.0649	0.0672	0.2458	0.2257
2012	No. of firms	794	1,793	2,958	30,698	15,335
	V(ΔNI)/V(ΔCF)	0.4001	0.0594	0.0762	0.2455	0.2315
2013	No. of firms	794	1,802	2,839	30,542	12,999
	V(ΔNI)/V(ΔCF)	0.3789	0.0595	0.0730	0.2448	0.2232

Year	Variable	Listed companies	Large private companies	Medium companies	Small companies	Micro companies
All years	No. of firm-years	6,318	13,067	20,630	256,562	217,647
	V(ΔNI)	0.0170	0.0027	0.0035	0.1132	0.1707
	SD, mean of bootstrap distribn	(1.27E-04, 0.0169)	(1.04E-06, 0.0027)	(1.05E-06, 0.0035)	(1.39E-04, 0.1132)	(2.09E-04, 0.1707)
	V(ΔNI)/V(ΔCF)	0.3313	0.0587	0.0695	0.2485	0.2231
	SD, mean of bootstrap distribn	(3.74-E03, 0.3314)	(3.82E-04, 0.0587)	(3.33E-04, 0.0696)	(4.43E-04, 0.2486)	(4.18E-04, 0.2230)
2006	No. of firms	768	1,367	1,970	34,087	38,136
	V(ΔNI)/V(ΔCF)	0.3199	0.0589	0.0783	0.2474	0.2325
2007	No. of firms	780	1,442	2,180	33,642	39,508
	V(ΔNI)/V(ΔCF)	0.3979	0.0579	0.0715	0.2519	0.2285
2008	No. of firms	780	1,575	2,249	32,945	40,240
	V(ΔNI)/V(ΔCF)	0.3857	0.0771	0.0851	0.2461	0.2266
2009	No. of firms	805	1,611	2,608	32,045	33,629
	V(ΔNI)/V(ΔCF)	0.3620	0.0606	0.0802	0.2500	0.2088
2010	No. of firms	790	1,733	2,842	31,662	18,114
	V(ΔNI)/V(ΔCF)	0.2088	0.0417	0.0549	0.2497	0.2198
2011	No. of firms	807	1,744	2,984	30,941	19,686
	V(ΔNI)/V(ΔCF)	0.3935	0.0649	0.0672	0.2458	0.2257
2012	No. of firms	794	1,793	2,958	30,698	15,335
	V(ΔNI)/V(ΔCF)	0.4001	0.0594	0.0762	0.2455	0.2315
2013	No. of firms	794	1,802	2,839	30,542	12,999
	V(ΔNI)/V(ΔCF)	0.3789	0.0595	0.0730	0.2448	0.2232

Notes: V(ΔNI) is the variability of earnings, which is measured by the variance of the residuals from Equations (1) and (4) to capture the smoothness of earnings; V(ΔNI)/V(ΔCF) is the ratio of variability of earnings to the variability of cash flows from operating activities, where the variability of earnings is measured by the variance of the residuals from Equations (1) and (4), and the variability of cash flows is measured by the variance of the residuals from Equations (2) and (5). This ratio is to capture the smoothness of earnings related to the smoothness of cash flows. We report, in parenthesis, the means and standard deviations of the bootstrapped variance of residuals [V(ΔNI)] and the ratio [V(ΔNI)/V(ΔCF)]. The standard deviation of the bootstrap distribution is our estimate of the standard error of the test statistic which approximates to a normal distribution. All variables are measured during the sample period, 2006-2013

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