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The valuation of earnings components by the capital markets. An international comparison

Author

Listed:
  • Susana Callao Gast�n

    (Department of Accounting and Finance, University of Zaragoza)

  • Beatriz Cu�llar Fern�ndez

    (Department of Accounting and Finance, University of Zaragoza)

  • Jos� Ignacio Jarne Jarne

    (Department of Accounting and Finance, University of Zaragoza)

  • Jos� Antonio La�nez Gadea

    (Department of Accounting and Finance, University of Zaragoza)

Abstract

Over the last decade we have witnessed an increasing process of globalisation in economic activity, in which the capital markets have inevitably been involved. Against this background, this paper presents a comparative study of the relevance of earnings and their components (operating, financial and extraordinary income) in 36 countries that are representative of different regions, levels of market development, accounting systems, etc. The results of our research confirm those obtained from earlier studies, providing evidence of the relevance of earnings figures for valuation purposes, regardless of the market analysed. Nevertheless, the importance of this information differs between countries. We have also established that the disaggregation of earnings into the component parts of the income statement provides the investor with incremental information regarding the market value of the company in question.

Suggested Citation

  • Susana Callao Gast�n & Beatriz Cu�llar Fern�ndez & Jos� Ignacio Jarne Jarne & Jos� Antonio La�nez Gadea, 2003. "The valuation of earnings components by the capital markets. An international comparison," Documentos de Trabajo dt2003-02, Facultad de Ciencias Económicas y Empresariales, Universidad de Zaragoza.
    • Handle: RePEc:zar:wpaper:dt2003-02
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    More about this item

    Keywords

    capital markets; accounting information; value relevance; international comparison.;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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