Value Relevance of Accounting Earnings and the Information Content of its Components: Empirical Evidence in Tunisian Stock Exchange
19 Pages Posted: 28 Oct 2006
Date Written: October 2006
Abstract
The aim of this paper is to examine the value relevance of accounting earnings and its components for firm valuation in Tunisian Stock Exchange. We have tested three hypotheses relatives to the value relevance of alternative accounting measures and to the effect of the decomposition of this variable on its explanatory power. Empirical evidence showed on one hand, that operating income, income before taxes, special items and income taxes are value relevant for firm valuation and on the other hand, cash flow from operations and accruals are not value relevant.
Keywords: accounting earnings, value relevance, explanatory power, information content, Tunisian Stock Exchange
JEL Classification: G12, G14, M41, M47, N27
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Capital Markets Research in Accounting
By S.p. Kothari
-
What is the Intrinsic Value of the Dow?
By Charles M.c. Lee, James N. Myers, ...
-
Accruals and the Prediction of Future Cash Flows
By Mary E. Barth, Donald P. Cram, ...
-
By Stephen Brown, Kin Lo, ...
-
A Comparison of Dividend, Cash Flow, and Earnings Approaches to Equity Valuation
-
By Mary E. Barth, William H. Beaver, ...
-
Investor Valuation of the Abandonment Option
By Philip G. Berger, Eli Ofek, ...
-
Investor Valuation of the Abandonment Option
By Peter Berger, Eli Ofek, ...
-
Accounting Conservatism, the Quality of Earnings, and Stock Returns
By Stephen H. Penman and Xiao-jun Zhang
-
Ratio Analysis and Equity Valuation
By Doron Nissim and Stephen H. Penman