Accounting Profitability and Firm Market Valuation: A Panel Data Analysis
Purpose: The relationship between accounting and market measures of firm financial performance is rarely investigated and produced in congruent results in the past.Therefore, this paper aims to investigate the relationship by examining the impact of profitability on firm market value. The profitab...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Universal Publishers
2017
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| Subjects: | |
| Online Access: | https://repo.uum.edu.my/id/eprint/23593/1/GBMR%209%201%202017%20679%20689.pdf |
| _version_ | 1825804951702470656 |
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| author | Rahman, Mohd Haseeb Ur Ibrahim, Mohd Yussoff Che Ahmad, Ayoib |
| author_facet | Rahman, Mohd Haseeb Ur Ibrahim, Mohd Yussoff Che Ahmad, Ayoib |
| author_sort | Rahman, Mohd Haseeb Ur |
| collection | UUM |
| description | Purpose: The relationship between accounting and market measures of firm financial performance is rarely investigated and produced in congruent results in the past.Therefore, this paper aims to
investigate the relationship by examining the impact of profitability on firm market value. The
profitability ratios like EPS, ROE, and ROA represent accounting while firm market signifies
market measures of firm financial performance.
Design/methodology/approach: The study selected stratified random sample of 320 nonfinancial
Malaysian listed companies for a period of five years from 2010-2014.The paper used pooled OLS with robust standard errors for 1600 observations of the panel data.Findings/ highlights: The study found that ROE has significant while ROA has an insignificant positive association with firm market value.Moreover, the relationship between EPS and firm market value is negative and statistically significant.Practical implications: The results of the study show that investors give value to the firms which maximize return on their equity.Based on these findings, investors, banks, insurance companies, financial institutions can deploy their economic resources.Originality/value: The paper contributes to inconclusive limited literature.Also, the paper provides important insights for shareholders, management of the firms, and other stakeholders. |
| first_indexed | 2024-07-04T06:24:01Z |
| format | Article |
| id | uum-23593 |
| institution | Universiti Utara Malaysia |
| language | English |
| last_indexed | 2024-07-04T06:24:01Z |
| publishDate | 2017 |
| publisher | Universal Publishers |
| record_format | eprints |
| spelling | uum-235932018-03-15T01:31:07Z https://repo.uum.edu.my/id/eprint/23593/ Accounting Profitability and Firm Market Valuation: A Panel Data Analysis Rahman, Mohd Haseeb Ur Ibrahim, Mohd Yussoff Che Ahmad, Ayoib HF5601 Accounting Purpose: The relationship between accounting and market measures of firm financial performance is rarely investigated and produced in congruent results in the past.Therefore, this paper aims to investigate the relationship by examining the impact of profitability on firm market value. The profitability ratios like EPS, ROE, and ROA represent accounting while firm market signifies market measures of firm financial performance. Design/methodology/approach: The study selected stratified random sample of 320 nonfinancial Malaysian listed companies for a period of five years from 2010-2014.The paper used pooled OLS with robust standard errors for 1600 observations of the panel data.Findings/ highlights: The study found that ROE has significant while ROA has an insignificant positive association with firm market value.Moreover, the relationship between EPS and firm market value is negative and statistically significant.Practical implications: The results of the study show that investors give value to the firms which maximize return on their equity.Based on these findings, investors, banks, insurance companies, financial institutions can deploy their economic resources.Originality/value: The paper contributes to inconclusive limited literature.Also, the paper provides important insights for shareholders, management of the firms, and other stakeholders. Universal Publishers 2017 Article PeerReviewed application/pdf en https://repo.uum.edu.my/id/eprint/23593/1/GBMR%209%201%202017%20679%20689.pdf Rahman, Mohd Haseeb Ur and Ibrahim, Mohd Yussoff and Che Ahmad, Ayoib (2017) Accounting Profitability and Firm Market Valuation: A Panel Data Analysis. Global Business and Management Research: An International Journal, 96 (1S). pp. 679-689. ISSN 1947-5667 https://search.proquest.com/docview/1903447129?pq-origsite=gscholar |
| spellingShingle | HF5601 Accounting Rahman, Mohd Haseeb Ur Ibrahim, Mohd Yussoff Che Ahmad, Ayoib Accounting Profitability and Firm Market Valuation: A Panel Data Analysis |
| title | Accounting Profitability and Firm Market Valuation: A Panel Data Analysis |
| title_full | Accounting Profitability and Firm Market Valuation: A Panel Data Analysis |
| title_fullStr | Accounting Profitability and Firm Market Valuation: A Panel Data Analysis |
| title_full_unstemmed | Accounting Profitability and Firm Market Valuation: A Panel Data Analysis |
| title_short | Accounting Profitability and Firm Market Valuation: A Panel Data Analysis |
| title_sort | accounting profitability and firm market valuation a panel data analysis |
| topic | HF5601 Accounting |
| url | https://repo.uum.edu.my/id/eprint/23593/1/GBMR%209%201%202017%20679%20689.pdf |
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