1. Nexus between Value Relevance of Accounting Information and Price-to-Earnings Ratios during Market Boom and Bust Cycle.
- Author
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Nawaz, Dil, Rasheed, Abdul, and Khalid, Waleed
- Subjects
ACCOUNTING information storage & retrieval systems ,STOCK exchanges ,FINANCIAL management - Abstract
Purpose: This study analyzes the impact of the value relevance of accounting information on price-to-earnings ratios in Pakistan during the stock market boom and bust period. Design/Methodology/Approach: Data from 322 non-financial firms listed in PSX from 2005 to 2022 is used in a study. The financial variables data has been hand-collected from annual reports published on the company’s websites and PSX Data Stream. The ADF test and panel OLS method are used for data analysis. Findings: The findings show that the EPS and book value variables positively and significantly influence the price-to-earnings ratio during the market boom and bust period. The CEPS, net income, and change in net income are found to be insignificant factors of price-to-earnings during market boom and bust periods. Implications/Originality/Value: It is concluded that VRAI plays an imperative role in influencing price-to-earnings ratios; therefore, investors should consider this information to invest in the stock market. [ABSTRACT FROM AUTHOR]
- Published
- 2024
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