If it can do this, it is seen as relevant. We put up alternative measures as competing hypotheses then test them. There is a heavy reliance on statistics in this area. 20 about which type of time series analysis should be used. Past quarterly earnings are better predictors than past annual earnings.
Depreciation clouds the picture.
We are not sure. In this area, we used paired sample techniques. We sometimes use accounting data as a proxy for something else. This has been used to try and create a bond rating model. 20 be a takeover target etc.