Studying Relationship between Qualitative Features of Profit and Return on Common Equity (A Data Mining on the Banks Accepted in Tehran Stock Exchange)
Downloads
The present research was conducted to study the relationship between the qualitative features of the profit, such as persistence, predictability, conservatism, timeliness of profit and return on owner’s equity and the factors mentioned have been considered as independent variables. The purpose is to understand and promote the level of qualitative features of information backing profit that is published in the capital market and can be useful in making decision. Return on common equity has been calculated based on dividing net profit of the period on the product of common equity changes in stock price and has been considered as the dependent variable. As well the control variables of the size of company, the coefficient of changes of profit (operational risk) and the ratio of book value to the market value as well were taken into account for improving results in research model. In order to collect the data, the published information of the Banks accepted in over-the-counter securities and stock Exchange of Tehran in the period between2010 until 2014. Finally, with the use of statistical analysis software and the results of testing hypotheses it was determined the qualitative features of the profit including persistence, predictability, timeliness and relevancy are associated positively and significantly with return on owners’ equity; but there was reverse and not significant relation between conservatism and return on common equity.
Esmailzadeh Mogheri, A. &Jalili, M. & Zand Abasabadi, A. (2010) impact of company governance on profit quality in Tehran stock exchange, Journal of management accounting, third year, No vii
Boulou, Gh. (2001) owners’ equity cost and profit features, accounting PhD dissertation, accounting and management faculty, Allameh Tabatabyi Uni.
Saghafi, A. & Aliaghayi, M. (1994) accounting profit behavior. Accounting studies, third year, No. ix, p. 5-21
Saghafi, A. & Kordestani, Gh. (2004) studying and explaining relationship between profit quality and market response to changes in cash dividend. Accounting studies, eleventh year, No. 37, p. 51-72
Saghafi, A. & Boulou, Gh. (2009) accounting researches, owners’ equity cost and profit features, No. 2, p. 1-26
Janjani, R. & Khodadadi, V. (2011) relation of profit and its components with return on shares emphasized by role of commitment amounts in Tehran stock exchange, scientific research Quarterly of accounting, third year, p. 84-113
Khaleghi Moghadam, H. (1995) profit in prediction, a criterion for evaluating accounting information, accounting and auditing studies, No. 10 & 11, p. 35-52
Khajavi, S. & Nazemi, A. (2005) relationship between profit quality and return on shares emphasized by role of commitment amounts in Tehran stock exchange, accounting and auditing studies, No. 40. P. 37-60
Sadighi, R. & Jalali, L. (2015) relation of credit risk and liquidity with Iranian banks performance, 26th conference of Islamic banking
Zarif Fard, A. (2009) identifying factors affecting profit quality, accounting PhD dissertation, Tehran university, management faculty
Kordestani, Gh. & Majdi, Z. (2007) relationship between profit qualitative feature and common stock capital cost. accounting and auditing studies, 14th year, No. 48, p. 85-104
Karami, Gh. & Tajik, K. & Moradi, M. (2006) relationship between profit quality and increase in capital based on shareholders’ financial claims in companies accepted in Tehran stock exchange, counting and auditing studies, No. 44, p. 23-73
Mojtahedzadeh, V. (2002) conservatism, Journal of accounting, No. 145, year 24, p. 23 & 73
Mardani, M. & Golestani, R. & Davachi Langroudi, H. (2016) court accounting, first ed., p. 126-134
Mashayekh, S. & Esmaili, M. (2006) relationship between profit quality and some aspects of leadership principles in companies accepted in Tehran stock exchange, counting and auditing studies, No. 45, p. 25-44
Nourvash, I. & Nazemi, A. &Heidari, M. (2006) commitment items quality and profit emphasized by role of commitment items estimate error, counting and auditing studies, No. 43, p. 135-160
Barth. Mary E.; William H. Beaver, Wayne R. Landsman. (2001). "The Relevance of the value Relevance Literature For Financial Accounting standard setting: Another View
"http//www.SSRN.com"
Bellovary, j. Giacomino, D., Akers, M. (2006). "A review of bankruptcy prediction studies": 14, 2006, from http://www.ebsco.com.
Biddle, G; G, sew, and A, Siegel. (1995). "Relative versus Incremental information content". Contemporary Accounting Research 12, PP 1-23.
Chan, K. Chan, L. Jegadeesh, N. Lakinishok, J. (2004)." earnings quality and stock returns", working paper university of Illinois at Urbana –Champaign-department of finance, PP 50.
Chiu, Chi, Li. (2009).” Do Transparency And Disclosure Predict Firm Performance?"
Fasley, D., and M. O Hara. (2004). Information and the cost of capital. Journal of Finance 59: PP 1553-1583.
Francis, J, R. Lafond, P.Olsson, and K. Schipper. (2004). Costs of equity and earnings attributes'. The Accounting Review 79: PP 967-1010.
Francies, I. Lafond, R. Olsson, P. Schipper, K. (2003)." earnings quality and the pricing effects of earnings patterns", working paper duke university, PP 53.
Francies, I. Lafond, R. Olsson, P. Schipper, K. (2005). "The market pricing of accruals quality", journal of accounting and economics, Vol.39, No.2, PP 295-327.
Ghosh, A.Gu and p. jain. (2004). "Sustaine earnings and revenue growth, earnings quality, and earning response coefficients", working paper, available at www.ssrn.com.
Jackson, C., (2005), History of Strategies and Challenges of Database Marketing.
Kaustav Sen. (2009), "Earnings surprise and sophisticated investor preferences in India", Journal of Contemporary.
Mardani, M. Salehi, A. Davachi, L.h. Golestani, R. Kia, z. (2017). "Investigating the Relationship between Cash Conversion Cycle with economic Evaluation Criteria and Stock Returns in the Companies Accepted in the Tehran Stock Exchange", Account and Financial Management Journal, Vol.2, No.10, PP 967-979.
Lenuse, and Verrecchia, (2004). Firms capital allocation choices, information quality, and the cost of capital. Working paper, University of Pennsylvania.
Watts. Ross L. (2003). "Conservatism in the accounting; part1: Explanation and implication". The Accounting Review 78, PP 207-221.
