Accrual Duration and Financial Health in Pharmaceutical Firms Listed on the Tehran Stock Exchange

This study investigates the financial resilience of Iran’s pharmaceutical firms listed on the Tehran Stock Exchange (TSE) through the lens of the accrual duration framework introduced by Dichev and Owens (۲۰۲۴), adapted to the institutional realities of a regulated emerging market. Using a balanced panel of ۳۰۸ firm‑year observations (۲۰۱۱–۲۰۲۵) across ۲۲ listed companies, the research decomposes total accruals into their “zero” and “positive” duration components to capture the temporal misalignment between earnings recognition and cash realization. The empirical analyses executed in Stata ۱۹.۵ on data harmonized with IFRS link accrual timing to operating, investing, and financing activities, highlighting how delayed reimbursements, administered prices and capital immobility shape accounting behavior in the Iranian context. Descriptive evidence reveals an exceptionally long operating cycle and extended PP&E life, underscoring structural liquidity frictions. The findings show that firms with higher positive duration accruals experience lower earnings persistence, greater reporting asymmetry and a widening gap between nominal profitability and realized cash flow a phenomenon emblematic of “paper profits” sustained by deferred value realization. By integrating the temporal dimension of accruals into solvency diagnostics, this study demonstrates that the accrual duration measure offers a dynamic and context sensitive indicator of financial quality, capable of distinguishing real performance from inflation‑driven accounting artifacts. The framework thus provides regulators and investors with a timing‑based risk metric for evaluating corporate durability under chronic liquidity stress and regulatory inertia in Iran’s pharmaceutical sector.

کلیدواژه ها:

Accrual duration ، Earnings persistence ، Pharmaceutical industry ، Cash flow ، Financial distress ، Inflation ، Liquidity risk