The Use of Financial Statements’ Information and Other Information in Investors’ Decisions

Abstract

This paper aims to study the ability of financial statements information and other information to predict stock returns, especially in times of uncertainty. This study uses the company size (measured in total assets), the debt ratio (leverage), Operating Cash Flow (OCF), Earnings Per Share, (EPS), and net profit as measures that reflect financial statements' information. On the other hand, nonfinancial statements' information (i.e., other information) is proxied by dollar component that reflects the firms' involvement in international trading activities or not. The study uses data from 86 firms registered in the Egyptian Stock Exchange from all non-financial institutions. The study covers the financial statements and stock return information from March 2021 to March 2022. The results revealed that company size and dollar components (non-financial statement information) have a significant and positive relationship with stock return. On the other side, the other financial statement's information revealed nonsignificant relation with stock return .‫ال‬ ‫مجلة‬ ‫المحاسبية‬ ‫بحوث‬ ‫اﻻ‬ ‫العدد‬ ‫مارس‬ ‫ول‬ ٣ ٢٠٢