Prior research has shown that accounting
earnings can be decomposed into two main
components: cash fl ow and accrual components.
Sloan (1996) investigates the earnings persistence
of reported earnings and their cash fl ow and
accrual components and fi nds that the accrual
component is less persistent than the cash fl ow
component. Moreover, Sloan (1996) examines the
market pricing of earnings and their cash fl ow and