The Use of Financial Ratio Models to Help Investors Predict and Interpret Significant Corporate Events

Ak, B. Korcan; Dechow, Patricia M.; Sun, Estelle; Wang, Annika Yu

doi:10.2139/ssrn.2335185

Cited by 9 publications

(8 citation statements)

References 114 publications

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“…Here, both Terry Shevlin and Greg Clinch focus on the economic consequences of financial reporting quality, with Shevlin (2013) presenting a review of, and reflection on, the empirical literature investigating the association between financial reporting quality and the cost of equity capital and Clinch (2013) analytically examining the links between disclosure quality, diversification, and cost of capital. In co-authored work, Stephen Taylor examines whether IFRS adoption has had an impact of accruals quality (Lai et al, 2013), Doug Skinner focuses on accounting standards by undertaking a review of the empirical literature into the politics of standard setting (Gipper et al, 2013), Patricia Dechow presents a review of the literature into the merits of financial ratio models in identifying and understanding the implications of corporate events (Ak et al, 2013), and lastly, Richard Sloan proposes and validates an approach based on fundamentals for evaluating investing strategies (Chee et al, 2013).…”

Section: Noted Authorsmentioning

confidence: 99%

A review of accounting research in the Asia Pacific region

Benson

Clarkson

Smith

et al. 2015

Australian Journal of Management

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In this paper, we review scholarly accounting research published within the Asia Pacific Region by analysing nine of the main accounting journals within the region along five dimensions. The nine journals we focus on are: Accounting, Auditing and Accountability Journal; Australian Accounting Review; Abacus; Accounting and Finance; Australian Journal of Management; Accounting Research Journal; Journal of Contemporary Accounting and Economics; Managerial Auditing Journal; and Pacific Accounting Review. The five dimensions we consider are: the most frequently cited papers; topical coverage; impact on practice; research method; and noted authors. Our review leads us to conclude that the accounting journals published within the Asia Pacific region make a significant contribution to research and practice both within the region and internationally.

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Section: Noted Authorsmentioning

confidence: 99%

A review of accounting research in the Asia Pacific region

Benson

Clarkson

Smith

et al. 2015

Australian Journal of Management

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“…Prior literature has found that financial ratio analysis can predict the failure of a firm (Beaver, 1966;Altman, 1968Altman, , 1977Ohlson, 1980;Keasey and Watson, 1991;Wu et al, 2010;Ak et al, 2013). Altman (1968) combines several ratios into a single predictive score of bankruptcy known as the Z-score, which is a function of profitability, turnover, leverage and liquidity ratios.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

Finance company failure in New Zealand during 2006–2009: Predictable failures?

Douglas

Lont

Scott

2014

Journal of Contemporary Accounting & Economics

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“…When the earnings are lower and the price is high, thus investors are likely to sell its shares. The financial statement provides the operating performance accurately; however, stock price will reveal a broader set of information (Ak, Dechow, Sun, & Wang, 2013). That information then becomes the consideration for the investors.…”

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confidence: 99%

Capital Structure, Profitability and Firm Value: Evidence From Mining Companies

Budianto¹,

Bustaman²

2018

IJEMBM

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This research investigates the impact of firm capital structure on profitability and firm value of the twenty eight mining companies listed in Indonesia Stock Exchange from the year 2009 to 2013. The capital structure is measured by the proportion of debt over total asset, ROA and ROE are used to measure the firm profitability, meanwhile stock price is applied to measure firm value. This study uses panel data regression analysis. After controlling with external factor such as GDP rate and inflation rate, and internal factor such as revenue growth and firm size (total asset), we find leverage has negative impact on ROA however they are not significant, thus it could be said capital structure has no effect on financial performance. The indicators that significantly affect financial performance come from the control variable, which is revenue growth. Our research also finds that the capital structure has a significant effect towards firm value. The firm size and GDP rate is more impactful towards firm value. This contradicts with the MM’s capital structure irrelevance proposition, but supports other theories such as pecking order theory and Trade-off theory

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The Use of Financial Ratio Models to Help Investors Predict and Interpret Significant Corporate Events

Cited by 9 publications

References 114 publications

A review of accounting research in the Asia Pacific region

A review of accounting research in the Asia Pacific region

Finance company failure in New Zealand during 2006–2009: Predictable failures?

Capital Structure, Profitability and Firm Value: Evidence From Mining Companies

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