In this study we investigate the relative ability of comprehensive income and net income to summarize firm performance as reflected in stock returns. We also examine which comprehensive income adjustments improve the ability of income to summarize firm performance. In this study we investigate this claim that income measured on a comprehensive basis is a better measure of firm performance than other summary income measures. The results do not show that comprehensive income is superior to net income for evaluating firm performance on the basis of stock return and price. In Tehran Stock Exchange except for investment, we found no evidence that comprehensive income for firm performance evaluation on the basis of cash flows prediction is superior to net income. While we found the better situation for state companies (only in other companies), that is firm performance evaluation on the basis of cash flows prediction using comprehensive income is superior to net income. Collectively, our results provide some evidence that show comprehensive income adjustments improve ability of income for reflecting firm performance, while there are not strong results.
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