Comparative Analysis the Power of Accounting and Non Accounting Informative Indicators in Explanation and Prediction of Stock Market Value Indicators

Subject Areas : Management Accounting

فرشاد هیبتی ¹ , محمد حسنی ²

1 - ندارد
2 - مسئول مکاتبات

Received: 2011-04-14 Accepted : 2011-06-26 Published : 2011-09-23

Keywords: valuation approaches, Relative Valuation Models, Price to Earnings&#x0D, &#x0D, and Price , Accounting and Non Accounting ,

Abstract :

In the investment process, using the models that can assist investors to predict firmvalue is necessary. In this research, the power of accounting and non accountinginformative indicators is investigated in explanation and prediction of stock marketvalue indicators. According to this, 30 variables are known as accounting and nonaccounting informative indicators and 2 variables of relative valuation models basedon price to earnings and price to book value are known as stock market valueindicators.In this research, at first, we use the accounting and non accounting informativeindicators to establish patterns that can explain relative valuation models based on P/E& P/B. The result of this analysis shows that compound accounting & non accountinginformative indicators have more explanatory power than both of these indicatorsseparately.Then, we examine the validity of prediction that is made by extracted patterns. Theresult of this examination shows that there is no meaningful difference between theaverage of predicted and real values in both predictive patterns of P/E & P/B.