Book Value Of Equity Research Articles

The Effect of Financial Performance on Market to Book Value of Equity (MBVE) in LQ45 Companies on the IDX Post Pandemi Covid 19

This study aims to test and prove whether financial performance affects the market to book value of equity (MBVE). The population in this study are all LQ45 companies listed on the IDX for the 2019-2021 period. Sampling was carried out by purposive sampling and 135 companies were selected. The data in this study come from secondary data obtained through documentation techniques. Data analysis with multiple regression partially using SPSS. The results showed that simultaneously there was a significant effect of CR, DER, and ROA on MBVE. Based on partial testing, it is concluded that CR, DER and ROA have a significant effect on MBVE.

IFRS-16 and Information Quality of Listed Non-Financial Firms in Nigeria

Lease accounting was revised in 2016 due to the contentious nature of its reporting in the financial statements under IAS 17- particularly in respect of operating leases. IAS 17 was criticized for impairing the quality of accounting information due to the inappropriate treatment of identified resources in control and financial obligations by lessee firms. IFRS 16 (effective 2019) eliminates the distinction between operating and finance leases requiring right-of-use assets and associated liabilities to be reported on the Statement of Financial Position. In cognizance of its objective of enhancing information quality, the paper assessed the relevance of accounting information reported subject to compliance with IFRS 16 in the context of listed non-financial firms in Nigeria utilizing lease finance. The Ohlson model was modified to regress share price on the book value of equity per share, earnings per share, and the interaction of these variables with IFRS 16 adoption using a data set for 2016-2021. GLS regression results indicate book value per share to have increased relevance with the adoption of IFRS 16, whereas the relevance of earnings per share remains unchanged. The paper concludes that IFRS 16 adoption enhances the information quality of listed non-financial firms in Nigeria. Recommendations are made for firms to optimize accounting processes to achieve or sustain information quality by adopting IFRS 16. The IASB, as a standard-setter, should also prioritize the cost-efficiencies of standards in their implementation, as this could account for a disparity in the perceived accounting information quality of varying-sized firms).

증권산업의 NCR제도 개정과 회계정보의 가치관련성

With the revision of the NCR system in 2014, there was a controversy over the predictive power of bankruptcy and the reliability of indicators between the indicators before and after the revision. Therefore this paper compared and analyzed the information usefulness of each indicator in terms of the value relevance. The results of analysis are that the higher the net capital ratio (pre-revision indicator), the higher the value relevance of profit or loss and the lower the value relevance of equity book value, but there was no differentiation in value relevance depending on the level of the net operating capital ratio (post-revision indicator). The typical relationship between financial soundness and value relevance revealed by previous studies is that the higher the soundness, the higher the relative value relevance of profit or loss. Results of this study imply that the net capital ratio has a typical relationship of financial soundness indicators to the value relevance of accounting information. Therefore, it can be seen that the net capital ratio is considered more important than the operating net capital ratio as a proxy for financial soundness in the process of evaluating the firm value by market participants. This study is significant in that it compared and analyzed the usefulness of the securities industry supervisory index from the perspective of the capital market.

Value relevance of earnings and book value of equity in profit versus loss reporting firms: significance of intangible intensity

PurposeThis study aims to investigate how the intangible intensive nature of firms affects the value relevance of earnings and the book value of equity between profit- and loss-reporting firms. The study also examines how firms’ intangible intensity affects the value relevance of R&D outlays between profit- and loss-reporting firms.Design/methodology/approachAn empirical analysis based on Ohlson’s (1995) framework is used. A total of 54,421 firm-year observations of Indian listed firms from financial years 1992–2016 constitute the study sample.FindingsThe findings suggest that the difference in the value relevance of earnings and the book value of equity between profit- and loss-reporting firms is more significant in non-intangible intensive firms than in intangible firms. Specifically, earnings are more value relevant in profit-reporting and non-intangible intensive firms, whereas book value of equity is more value relevant in loss-reporting and intangible intensive firms. The results also suggest that the difference in the incremental value relevance of R&D information between profit- and loss-making firms is higher in intangible intensive firms than in non-intangible intensive firms.Practical implicationsThe findings of this study can help managers, standard-setters and investors make effective decisions.Originality/valueThis study offers insights into the impact of intangible intensity on the value relevance of aggregated and disaggregated accounting information between profit- and loss-making firms in institutional settings where capitalization of R&D expenditures is allowed.

CEO Social Capital and the Value Relevance of Accounting Metrics

Equity investors value CEO social capital when pricing firm equity. When CEO social capital is high, the value relevance of the book value of equity declines, whereas the value relevance of earnings measures increases. Results are stronger for firms in high-tech industries where information asymmetries are higher. Social capital may be deconstructed into informational and reputational effects and we report that social capital is a meaningful determinant of value relevance in both scenarios. Results are robust to alternative variable definitions, controls and tests for endogeneity. The results strongly suggest that CEO social capital improves the information environment around firms, benefiting users of accounting metrics.

The impact of Covid-19 pandemic on the value relevance of cash flows: evidence from banks

PurposeThis paper is motivated by the ongoing debate on the value relevance of cash flow statement (CFS) between bank regulators, on one hand, and accounting standard setters, on the other hand. The importance and usefulness of cash flows during economic turmoil exacerbated by the Covid-19 pandemic has recently gained attention. Hence, this paper investigates the impact of Covid-19 pandemic on the value relevance of cash flows (CF) beyond accounting earnings and book equity.Design/methodology/approachA panel of 236 bank-year observations is examined for value relevance in emerging capital markets of Gulf Cooperation Council (GCC) countries. Using value relevance regression, operating and non-operating CF items are tested for value relevance beyond earnings and book value of equity during the periods 2018–2019 (pre-pandemic) and 2020–2021 (pandemic).FindingsThere is limited value relevance of CF beyond accounting earnings and the book value of equity. The distinction between operating and non-operating CF is not informative. However, the value relevance is significant during the pandemic, indicating that investors rely on CF for valuation purposes at times of uncertainty, corroborating further research on CF distress predictive ability.Originality/valueThis paper provides novel evidence on value relevance of CF and its superiority to accounting earnings and equity values during times of uncertainty. It extends a small body of research in the banking sector in emerging markets. Hence, it complements prior literature and has practical implications to accounting standard setters and bank regulators in emerging markets.

MARKET REACTION TO EARNINGS MANAGEMENT AND THE ROLE OF AUDIT QUALITY: EVIDENCE FROM INDONESIA

This study aims to determine whether the earnings management influences market reaction and whether audit quality moderates the relationship between earnings management and market reactions. The research sample has 115 manufacturing companies that go public in Indonesia Stock Exchange listed in 2013 – 2015 so that the number of samples (n) = 345 observations. Discretionary accruals are used to gauge the earnings management.. This study uses boostrap test to examine the hypothesis. The result shows that earnings management affects the market reaction positively. So it indicates if the market still gives a positive reaction to the report that generates earnings even though it contains earnings management. The interaction between book value equity and audit quality has a significant positive effect on the relationship between earnings management and market reaction.
 
 

Hubungan antara Investment Opportunity Set dan Kebijakan Dividen Pada Perusahan yang Listing di Bursa Efek Indonesia

Company growth is a problem faced by every company. The growth of the company can be seen from the firm value. Companies are very careful to determine a policy, because a policy can have an impact on firm value. The purpose of the company itself is to maximize the firm value , because this is can increase owner whealth. Therefore many companies are competing to increase the firm valu. One that affects the value of the industry is the dividend policy. This research aims to determine the relationship between dividend policy and company growth proxied by the investment opportunity set (IOS) in companies listed on the Indonesian Stock Exchange (IDX). In this research, researchers used a correlational study which is part of a causal research design using a stratified random sampling technique. IOS is proxied by the following ratios including: Capital Additional per Market Value of Assets (CAPMVA), Price Earning Ratio (PER), Market Value of Equity to Book Value of Equity (MVEBVE), Market Value of Assets to Book Value of Assets ( MVABVA), and Additional Capital per Book Value of Assets (CAPBVA). This research result a conclusion regarding the phenomenon that occurs on the Indonesia Stock Exchange (IDX), that are companies listed on the IDX are dominated by growing companies, then the majority of companies listed on the IDX tend to allocate company profits for future investment rather than being distributed to investors through dividends. Another conclusion obtained from this research is that there is a significant positive relationship between dividend policy and investment opportunity sets with a correlation value of 0.279.

증권회사 영업용순자본의 가치관련성에 관한 연구

Purpose - The purpose of this study is to examine the information effect of securities firm’s net operating capital, securities firm’s regulatory purposes capital, by analyzing the value relevance of net operating capital.
 Design/methodology/approach - This study was empirically analyzed using samples of domestic listed securities firms in the past 12 years, and multiple regression analysis and Vuong (1989) test were used together as specific research methods.
 Findings - First, it was found that the net operating capital of securities firms has an incremental value relevance that is added to basic accounting information (equity book value, profit or loss information). Second, after classifying equity capital on the books into net operating capital and the rest of equity capital, the value relevance of net operating capital was significantly higher than that of other equity capital.
 Research implications or Originality - The results of this study indicate that the level of regulatory capital in the securities industry can be used in the process of evaluating firm value in the capital market, and it is significant in that capital market evaluation can be stratified according to regulatory purposes.

IOS (INVESTMENT OPPORTUNITY SET) SEBAGAI VARIABEL UTAMA PENINGKATAN NILAI PERUSAHAAN

This study aims to see the influence of Good Corporate Governance (GCG) which is proxied by the Independent Board of Commissioners (DKI), Return on Equity (ROE), Investment Opportunity Set (IOS) which is proxied by the Market to Book Value of Equity (MBVE). to Corporate Value (PBV). The object of this research is 154 secondary data from the Indonesian Stock Exchange (IDX), but there are only 143 data because the normality of the data does not reach 0.05. The method of data analysis in this study is descriptive analysis, data normality test. The tool or application used to analyze the data in this study is SPSS v.24 software. The results of this study indicate that the GCG variable proxied by the Independent Board of Commissioners has no significant effect on PBV, the ROE variable has no significant effect on PBV, the IOS variable has a significant positive effect on PBV.

Pengaruh Ukuran Perusahaan, Kinerja Lingkungan, dan Voluntary Disclosure terhadap Nilai Perusahaan: Studi Empiris Perusahaan Sektor Industri Dasar dan Kimia yang Terdaftar di Bursa Efek Indonesia

This study aims to provide empirical evidence regarding the effect of firm size, environmental performance, and voluntary disclosure partially and simultaneously on firm value in basic and chemical industrial companies. This study uses a type of causal research with a quantitative approach. The population in this study is the basic and chemical industrial sector companies listed on the Indonesia Stock Exchange in 2014 - 2020 as many as 80 companies. This study used a purposive sampling technique with a selected sample of 16 companies. This study uses secondary data obtained from www.idx.co.id and company sites. The data analysis method used is panel data regression analysis. The measurement of firm value follows the latest Tobin's Q measurement by comparing the market value of equity with the book value of equity. The results showed that the variables of firm size, environmental performance, and voluntary disclosure simultaneously had no effect on firm value. Based on the partial test, firm size and environmental performance variables have no effect on firm value with a negative relationship direction and voluntary disclosure variables have a significant negative effect on firm value. For further research, it is recommended to use other variables and expand the research sample.

The Effect of Dividend Policy and Market to Book Value of Equity on Firm Value in Energy Sector Companies Listed on Indonesia Stock Exchange

This study aims to determine the effect of dividend policy and market to book value of equity on the value of energy sector companies listed on Indonesia Stock Exchange for the 2017–2021 period. This study uses quantitative method with purposive sampling as method of selecting samples and 30 companies were selected as samples. The analytical method used is a multiple linear regression. The results of this study indicate that partially dividend policy has a significant positive effect on firm value and market to book value of equity has a significant negative effect on firm value.

Effect of Company Profit, Operational Cash Flow and Book Value of Equity on Stock Price

In 2021, sector mining experienced a growth of 7.78% yearly (YoY). The reason occurs because of exists increase in the price of commodities by a hundred percent. It is what becomes something phenomenon based on the study of this. Study this conducted with destination for knowing influence from Company Profit, Operating Cash Flow, and Book Value Equity on the price of a share company. Company Profit, Operating Cash Flow, and Book Value Equity role as variable independent, while the share price plays a role as a variable dependent. As for the population in the study, this is company mining companies listed on the Indonesia Stock Exchange (IDX), totaling 47 companies. At the same time, the sample used in the study consists of 9 companies whose price share tends to be stable. Study this use method analysis multiple linear regression, with the testing hypothesis in the form of t-test (partial), F-test (simultaneous), and coefficients determination. Whereas method testing data using normality test, multicollinearity test, heteroscedasticity test, and autocorrelation test. Results of the study show that company profit and book value Equity are positively and significantly influenced by Share Prices. Whereas Operating Cash Flow no had influence positive and significant on Share Prices.

Effect of Company Profit, Operational Cash Flow and Book Value of Equity on Stock Price

Effect of Company Profit, Operational Cash Flow and Book Value of Equity on Stock Price

Risk-Return Relationship in the Nigerian Stock Market: Comparative between Fama-French Five-Factor Model and Higher Moment Fama-French Five-Factor Model

The study looked at the relationship between risk and return in the Nigerian stock market using Fama-French five-factor model and Higher Moment Fama-French five-factor model. The employed 90 companies’ stocks that are frequently traded out of the sample size of 113 companies’ stocks. The monthly stock prices, market index, risk-free rate (which was substituted with the rate on Treasury bills), ownership shareholdings, market capitalization, book value of equity, earnings before interest and taxes, and total assets were the data used in this study. The entire sample period covered from 2005-2020. The data was extracted from the Nigerian Group of Exchange (NGX) website, the Central Bank of Nigeria (CBN) website, and the Standard and Poor (S&P) database. The Fama-MacBeth two-step regression method was employed. It was found that systematic risk has significant negative effect on return while unsystematic risk has significant positive effect on return. The study concluded that the long standing view of hypothesised positive relationship between risk and return does not hold in the Nigerian stock market and the assumption that market risk is the only determinant of return is invalidated. Also, systematic coskewness risk is an important risk factor in the Nigerian stock market and higher moment FF5F model and CoFF5F model is superior to FF5F model. The study recommended that the investors should focused on how their investment return co-move with other dimension of risk such as unsystematic risk, systematic cokewness risk, systematic cokurtosis risk and non-market risk apart from the systematic risk.

The effect of IFRS adoption on the value and applicability of accounting information for Dmbin Nigeria

The effect of IFRS adoption on the value and applicability of accounting information for deposit money banks (DMB) is the focus of this research. This study investigates whether the implementation of international financial reporting standards has enhanced greatly the usefulness and relevance of accounting information in the financial statements of quoted deposit money banks in Nigeria. All twenty-one (21) recognized DMB’s make up the research population. In the study, eight (8) deposit money banks were sampled. Data were gathered from the sampled banks' annual reports, especially financial statement data from the pre-adoption years of 2009 to 2011 and the post-adoption years of 2012 and 2014. Multiple regressions and descriptive statistics were used to examine the effect of IFRS implementation on the usefulness of accounting information. Results of the study demonstrates share prices are more directly correlated to book value of equity per share and earnings per share of money bank deposits than they were under the old Nigerian SAS. Further Findings reveals profits margin and other financial performance indices increased significantly in terms of relevance and value of accounting information over period under review that is the post-IFRS adoption era. Therefore, the study concludes that value relevance is statistically more significant after IFRS implementation than it was before.

연결 RBC제도의 도입과 가용자본의 가치관련성 변화

This study empirically analyzes the value relevance of available capital(hereafter AV) by comparing it with the value relevance of equity book value, and whether the value relevance of AV changed significantly due to the adoption of the consolidated RBC system.
 The analysis results are as follows. First, it was reported that the value relevance of AV was significantly lower than the value relevance of equity book value. This indicates that the low value relevance of the insurer’s net profit is not because the valuation of the insurers is based on the liquidation value, but because the usefulness of the insurer’s net profit itself is low. Second, the value relevance of AV has significantly increased since the adoption of the consolidated RBC system. This is interpreted as a result of indicating that the change of RBC system in a consistent direction in IFRS, Basel Ⅲ and Solvency Ⅱ is a desirable direction in terms of value relevance. This study is significant in that it indirectly confirmed the perspective of valuation in the capital market and reviewed the effect of implementing the new supervisory system from the perspective of valuation in the capital market.

Assessing banks’ resilience: A complementary approach to stress testing using fair values from banks’ financial statements

AbstractFor more than a decade, supervisory banking authorities in Europe and the United States have sought to assess the resilience of banks to adverse economic episodes to safeguard the financial system's stability. They rely on regulatory capital measures like Common Equity Tier 1 (CET1) relative to risk‐weighted assets in the aftermath of potential economic crises. We propose a new measure of banks' resilience based on financial statements. The fair value margin (FVM) is estimated as the difference between the fair value of assets and the book value of liabilities, scaled by the book value of equity. We find that FVM is positively associated with the surplus or shortfall of CET1 resulting from the stress testing results from 2014, 2016 and 2018. To corroborate the relevance of FVM for supervisory authorities, we compare the ability of the loan component of FVM to predict future credit losses with the capital surplus/shortfall metric derived from the stress test. The findings indicate that the fair value of loans predicts net charge‐offs better than stress test outcomes. Therefore, we suggest that FVM could be used as a readily available and relatively low‐cost tool to assess bank resilience, thus complementing the stress test exercises.

The Effect of Altman Z-Score as Tool for Predicting Potential Bankruptcy on Stock Prices in Retail Subsector Companies Listed on the IDX in 2019 – 2021

The purpose of this study is to determine the Effect of Altman Z-Score as Tool for Predicting Potential Bankruptcy on Stock Prices in Retail Companies Listed on the IDX in 2019 – 2021. The data collection technique in this study uses documentation methods as well as literature studies published by the company. The data in this study uses financial statements published by retail sector companies listed on the Indonesia Stock Exchange in 2019 – 2021 by sampling using purposive sampling techniques. Companies that have met the sampling criteria are 11 companies. The data analysis method in this study uses Altman Z-score bankruptcy analysis, as well as for financial ratios using the ratio of Altman Z- score consisting of Working capital on total assets, retained earnings on total assets, profit before tax and interest on total assets, and book value of total equity at the book value of total liabilities. The next data analysis technique in this study used classical assumption tests, simple liner regression, and other hypothesis test tools. The results of this study showed that the Altman Z-score had a significant effect on the Stock Price of 17.7% with a calculated t value of 2.578 > 2.03951 (0.05 significant α) from the table. Based on the results of the Calculated Altman Z-score classification, it is shown that in 2021 there are 36 companies in a state of bankruptcy, 28% are in a state of gray area, and 36% are in a safe state.

The Implication of IFRS Financial Instruments Disclosure on Value Relevance

The main objective of this research is to examine the effects of financial instruments declared under IFRSs on value relevance over thirteen years. The research sample included 35 European enterprises that were listed on the main market of the London Stock Exchange from 2007 to 2019. This study focuses on the adoption of IFRS.7 and IAS.32 disclosure standards, in line with previous studies. The Ohlson model (1995) was utilised in the study to evaluate the dependent variable since it is the module used most often in determining value relevance. The findings indicated that financial knowledge about financial instruments (FI) was typically valuable throughout the research. In addition, the significance of financial instruments and other disclosures when examining sub-components were not valued as relevant but rather provided information regarding the kind and level of exposure to FI risks. Furthermore, the earnings and book value of the common equity have a favourable impact on the value relevance. Hence, the key contributions of this study went beyond enriching the body of literature to make recommendations regarding the most influential determinant among financial instrument items that positively enhance value relevance.