OCF classification choices
Footnote 26 The number of firms is reduced from 798 to 538 because the following are excluded: firms that changed their classification choice during the period; firms from Denmark, Finland, and Sweden (where classification choices for interest paid and interest received exhibit little or no variation); and firms missing data to compute all independent variables.
Results of the regression using differences in OCF as the dependent variable are presented in the left columns of Table 6, panel B. A higher value of the differences in OCF variable, OCF_Reported less OCF_Pro forma_USGAAP, signifies a greater OCF-enhancing impact of classification choices that differ from the hypothetical benchmark. As expected, we find that Distress_Hi (an indicator variable signifying greater likelihood of financial distress) is positively and significantly related to OCF_Reported less OCF_Pro forma_USGAAP. Continue reading Table 6, panel A, reports descriptive statistics for variables in the determinants analysis