Open AccessRole of Value Added and Conventional Accounting Measures in Stimulating Stock Market Returns: A Study of Non-Financial Sector Listed at Pakistan Stock Exchange
Author(s) -
Nosheen Rasool,
Safi Ullah,
Muhammad Mubashir Hussain,
Muhammad Usman
Publication year - 2021
Publication title -
journal of accounting and finance in emerging economies
Language(s) - English
Resource type - Journals
eISSN - 2519-0318
pISSN - 2518-8488
DOI - 10.26710/jafee.v7i1.1599
Subject(s) - return on equity , stock exchange , economic value added , earnings per share , business , return on assets , growth stock , equity (law) , market value added , accounting , book value , stock market , shareholder , restricted stock , stock (firearms) , economics , financial system , finance , earnings , market value , profit (economics) , corporate governance , law , horse , engineering , biology , microeconomics , paleontology , political science , mechanical engineering
The purpose of this study is to examine the comparative relationship of value-added and conventional financial performance indicators with stock returns of listed companies of Pakistan Stock Exchange. Stock Return (SR) is used as an outcome variable, whereas, for measuring explanatory variables, Traditional Financial Performance indicators includes return on assets (ROA), return on equity (ROE), Return on Capital Employed (ROCE) and Earnings Per Share (EPS) whereas modern performance indicators is measured through economic value added (EVA), economic value added movement (EVAM), economic value added spread (EVAS). The sample consists of 107 companies and having 856 observations of non-financial sector listed on Pakistan Stock Exchange (PSX) for the time period 2011 to 2018. Findings reveal that stock returns are more influenced by the value that is created by listed companies for their shareholders than the accounting profits. The study aims at providing useful information for the management, investors, researchers, and regulators.