Informative Content of Cash Flows in the Analysis of Risk

The proposed of this paper is to determine the informative content of the cash flows related to the earnings of the process of explaining the firm's risk. The risk proxies used are Mark-to-Book, Market Beta, financial leverage and insolvency risk. The models are solved by the ordinary least square (OLS) using the panel data technique. The population of this study involves companies listed on the Buenos Aires Stock Exchange in the period from 2004 to 2012. The evidence for firms listed in the Buenos Aires Stock Exchange indicates that the Cash Flow Statement shows an additional informative content to the earnings. The operating, investing, and financing cash flows exhibit a differential effect for the different risk proxy; however, the investment cash flows predominate in the risk market.