Table 2.

Descriptive Statistics of Main Variables

	Mean	Std. Dev.	10%	25%	50%	75%	90%
NIBE	0.0403	0.1379	−0.0383	0.0155	0.0485	0.0864	0.1317
CFO	0.0801	0.1601	−0.0247	0.0410	0.0880	0.1380	0.1956
ACC	−0.0398	0.0973	−0.1202	−0.0768	−0.0416	−0.0073	0.0409
CACC	0.0098	0.0939	−0.0603	−0.0204	0.0051	0.0360	0.0828
PPE	0.3839	0.2807	0.0908	0.1793	0.3153	0.5390	0.7815
ΔREV	−0.0141	0.5593	−0.2926	−0.1037	0.0000	0.0968	0.2519
ΔAR	−0.0026	0.0898	−0.0645	−0.0217	0.0000	0.0198	0.0565
Assets	6.1825	2.1005	3.4150	4.6323	6.1579	7.7135	9.0635
Oper. cycle	4.7474	0.6550	4.0113	4.4226	4.7958	5.1460	5.4609
Intang. int.	0.0861	2.5462	0.0000	0.0000	0.0000	0.0262	0.0773
Capital int.	0.3512	0.2318	0.0853	0.1686	0.2959	0.5002	0.7223
Growth	0.1231	1.6562	−0.1088	−0.0063	0.0640	0.1543	0.2988
Leverage	1.3254	35.5874	0.2648	0.5583	1.1298	1.9090	3.0102

This table reports the mean, the standard deviation, the 10^th, 25^th, 50^th, 75^th and 90^th percentile for the main variables used. The sample period covers the period 1988–2007 and comprises 27,589 firm–year observations for which all the earnings quality measures under consideration can be computed. NIBE: net income before extraordinary items; CFO: cash flow from operations; ACC: total accruals; CACC: current accruals; PPE: gross property, plant and equipment; ΔREV: change in revenues; ΔAR: change in accounts receivable. All the above variables are scaled by total assets at the beginning of the period. Assets: natural logarithm of total assets; operating cycle: natural logarithm of the sum of days accounts receivable and days inventory; intangible intensity: reported R&D expense divided by sales (R&D expense is set to zero when absent); capital intensity: net book value of property, plant and equipment divided by total assets; growth: percentage change in sales; leverage: total liabilities divided by equity book value.