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Profit of Tourism Companies and their Market Evaluation On ZSE

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  • Penda Ivor Altaras

    (MBA, assistant professor, Libertas International University, Zagreb, Croatia)

Abstract

The author of this paper presents a statistical analysis of data on realized profits of companies in the tourist sector, whose shares are listed on the Zagreb Stock Exchange and used for active trading. Data on the realized profit for the companies in accounting period 2010 - 2015 is correlated with the prices of shares. Based on the above obtained results about the direction and strength of this correlation the author concludes about the extent to which the market takes into account profit of the companies as a relevant indicator for investments. This information can be extremely significant because, on the one hand, it provides information about the functionality of the market as a comprehensive socio-economic mechanism that anticipates all the available information based on which the prices of the shares are created as a monetary expression of the presumed value of companies. On the other hand, this information tells us about the expectations of active market participants about the future development of the tourism sector, which already accounts for almost 20% of the Croatian GDP. In addition, the author examines what other explanations could be used for the part of variance which is not explained with the correlation between profit and price of shares.

Suggested Citation

  • Penda Ivor Altaras, 2017. "Profit of Tourism Companies and their Market Evaluation On ZSE," Acta Economica Et Turistica, Sciendo, vol. 3(1), pages 39-46, June.
    • Handle: RePEc:vrs:acectu:v:3:y:2017:i:1:p:39-46:n:5
    DOI: 10.1515/aet-2017-0005
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    References listed on IDEAS

    as
    1. Harris, Ts & Lang, M & Moller, Hp, 1994. "The Value Relevance Of German Accounting Measures - An Empirical-Analysis," Journal of Accounting Research, Wiley Blackwell, vol. 32(2), pages 187-209.
    2. Collins, Daniel W. & Maydew, Edward L. & Weiss, Ira S., 1997. "Changes in the value-relevance of earnings and book values over the past forty years," Journal of Accounting and Economics, Elsevier, vol. 24(1), pages 39-67, December.
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