Key accounting value drivers that affect stock returns: evidence from Greece
Purpose – This paper seeks to investigate the accounting factors that affect the value of a firm. Design/methodology/approach – Cross-sectional analysis is employed to investigate the association between critical accounting ratios and stock returns. Findings – This study finds that the operating performance of a company, its growth opportunities and its capability to generate profits from its sales affect stock returns. Practical implications – This study provides insights regarding the extent that policies concerning operating, investment and working capital management affect stock returns. The findings of this study can be helpful to managers for selecting and implementing the appropriate business policies. Besides, current shareholders and investors may find the results of this study useful in identifying the drivers of stock values. Originality/value – The paper tests, empirically, the effect of the key value drivers on stock returns in a developing stock exchange.
Volume (Year): 36 (2010)
Issue (Month): 11 (November)
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References listed on IDEAS
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- Leuz, Christian & Nanda, Dhananjay & Wysocki, Peter D., 2003. "Earnings management and investor protection: an international comparison," Journal of Financial Economics, Elsevier, vol. 69(3), pages 505-527, September.
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- Bhattacharya, Utpal & Daouk, Hazem & Welker, Michael, 2003. "The World Price of Earnings Opacity," Working Papers 127185, Cornell University, Department of Applied Economics and Management.
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