EARNINGS AND CASH FLOW PERFORMANCES
SURROUNDING IPO
Abstract
Initial
public offerings (IPOs) offer a fruitful area to be explored given the
existence of asymmetric information among various parties interested in the
IPO. This study attempts to examine whether there is significant increase in
earnings level prior to the offering to be interpreted as the existence of
earnings management. The behaviour of cash flow from operation is also
examined.
A
sample of 35 Indonesian IPOs that made public during 2002-2005 periods was
examined. The t-test for mean difference was performed to test whether earnings
differences persist. The findings show that earnings level tends increase in
the year closes to the IPO date, but decrease in the next two year after that.
The behaviour of cash flow from operating activities is almost similar.
However, this study is unable to state that earnings management is strongly
evidenced in Indonesian IPO setting.
Keywords: IPOs, prospectus, earnings and cash flow performance
Full Download
No comments:
Post a Comment