IDEAS home Printed from https://ideas.repec.org/p/sek/iacpro/4106521.html
   My bibliography  Save this paper

The Effect Of Earnings Per Share, Book Value And Systematic Risk On Equity Valuation In Manufacturing Company Listed On Indonesian Stock Exchange For The Year 2011-2014

Author

Listed:
  • MUSLIM ABDUL DJALIL

    (UNIVERSITY OF SYIAH KUALA)

  • MIRZA TABRANI

    (UNIVERSITY OF SYIAH KUALA)

  • Jalaluddin

    (Faculty of Economics and Business, Univ of Syiah Kuala)

Abstract

The objectives of this research are to measure the partial and simultaneous influence of : the Earning Per Share (EPS) on Equity Valuation, Book Value on Equity Valuation, and Systematic Risk on Equity Valuation. With a quantitative model employed, the data collected in this research are hence based on secondary sources of which are derived from audited financial statements published by the capital market reference centre at the Indonesia Stock Exchange. The research used random sampling method in selecting the researched sample. From the population of all manufacturing companies of 2011-2014 that consistently listed in Indonesian Stock Exchange, it was selected 96 mixed manufacturing companies as the research sample. This research used multiple linear regression equation to test the researched hypotheses and employed SPSS statistical software for data processing. The outcome of research indicated that Earning Per Share (EPS) partially has a significant positive influence on Equity Valuation; Book Value partially has a significant negative influence on Equity Valuation; Systematic Risk partially does not have a significant influence on the Equity Valuation; and Earning Per Share (EPS), Book Value, and Systematic Risk have a simultaneous influence on Equity Valuation. The using combined three variables of EPS, Book Value, and Systematic Risk influencing on Equity Valuation in the context of a combined type of manufacturing companies as a theoretical research framework with data sample from a listed manufacturing companies? audited financial statements as far as the researcher?s concerned is the novelty of this research. The major limitations of the research that it does not reflect deeply the performance of the industry and unable to capture the individual managerial perceptions involved in the industry

Suggested Citation

  • MUSLIM ABDUL DJALIL & MIRZA TABRANI & Jalaluddin, 2016. "The Effect Of Earnings Per Share, Book Value And Systematic Risk On Equity Valuation In Manufacturing Company Listed On Indonesian Stock Exchange For The Year 2011-2014," Proceedings of International Academic Conferences 4106521, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iacpro:4106521
    as

    Download full text from publisher

    File URL: https://iises.net/proceedings/25th-international-academic-conference-oecd-paris/table-of-content/detail?cid=41&iid=016&rid=6521
    File Function: First version, 2016
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dechow, Patricia M., 1994. "Accounting earnings and cash flows as measures of firm performance : The role of accounting accruals," Journal of Accounting and Economics, Elsevier, vol. 18(1), pages 3-42, July.
    2. Abell, John D. & Krueger, Thomas M., 1989. "Macroeconomic influences on beta," Journal of Economics and Business, Elsevier, vol. 41(2), pages 185-193, May.
    3. James S. Ang, 1992. "On the Theory of Finance for Privately Held Firms," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 1(3), pages 185-203, Spring.
    4. Basu, Sudipta, 1997. "The conservatism principle and the asymmetric timeliness of earnings," Journal of Accounting and Economics, Elsevier, vol. 24(1), pages 3-37, December.
    5. Mary E. Barth & Sanjay Kallapur, 1996. "The Effects of Cross†Sectional Scale Differences on Regression Results in Empirical Accounting Research," Contemporary Accounting Research, John Wiley & Sons, vol. 13(2), pages 527-567, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kothari, S. P., 2001. "Capital markets research in accounting," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 105-231, September.
    2. Ballas, Apostolos A. & Hevas, Dimosthenis L., 2005. "Differences in the valuation of earnings and book value: Regulation effects or industry effects?," The International Journal of Accounting, Elsevier, vol. 40(4), pages 363-389.
    3. Misund, Bård & Asche, Frank & Osmundsen, Petter, 2008. "Industry upheaval and valuation: Empirical evidence from the international oil and gas industry," The International Journal of Accounting, Elsevier, vol. 43(4), pages 398-424, December.
    4. Manganaris, Panayotis & Beccalli, Elena & Dimitropoulos, Panagiotis, 2017. "Bank transparency and the crisis," The British Accounting Review, Elsevier, vol. 49(2), pages 121-137.
    5. Ludovic Vigneron & Yves Mard, 2016. "Earnings management across publicly traded and privately held French SMEs," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 29(3), pages 416-440.
    6. Hui, Kai Wai & Nelson, Karen K. & Yeung, P. Eric, 2016. "On the persistence and pricing of industry-wide and firm-specific earnings, cash flows, and accruals," Journal of Accounting and Economics, Elsevier, vol. 61(1), pages 185-202.
    7. Luo, Yan & Wang, Xiaohuan & Zhang, Chenyang & Huang, Wei, 2021. "Accounting-based downside risk and expected stock returns: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 78(C).
    8. Jani Saastamoinen & Hanna Savolainen, 2021. "Does a leopard change its spots? Auditors and lawyers as valuation experts for minority shareholders in the judicial appraisal of private firms," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 48(3-4), pages 613-636, March.
    9. Gil Sadka, 2007. "Understanding Stock Price Volatility: The Role of Earnings," Journal of Accounting Research, Wiley Blackwell, vol. 45(1), pages 199-228, March.
    10. Henry Jarva & Matthijs Lof, 2024. "Identifying accounting conservatism in the presence of skewness," Review of Quantitative Finance and Accounting, Springer, vol. 62(2), pages 553-577, February.
    11. Palea, Vera, 2014. "Are IFRS value-relevant for separate financial statements? Evidence from the Italian stock market," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 23(1), pages 1-17.
    12. Christof Beuselinck & Marc Deloof & Sophie Manigart, 2004. "Venture Capital, Private Equity and Earnings Quality," Vlerick Leuven Gent Management School Working Paper Series 2004-02, Vlerick Leuven Gent Management School.
    13. Peter F. Pope, 2003. "Discussion of Disclosure Practices, Enforcement of Accounting Standards, and Analysts' Forecast Accuracy: An International Study," Journal of Accounting Research, Wiley Blackwell, vol. 41(2), pages 273-283, May.
    14. Jeremiah Green & Henock Louis & Jalal Sani, 2022. "Intangible Investments, Scaling, and the Trend in the Accrual–Cash Flow Association," Journal of Accounting Research, Wiley Blackwell, vol. 60(4), pages 1551-1582, September.
    15. Begona Giner & Carmelo Reverte, 2001. "Valuation implications of capital structure: a contextual approach," European Accounting Review, Taylor & Francis Journals, vol. 10(2), pages 291-314.
    16. Bernard Olivero & Nadia Sbei Trabelsi, 2008. "Analyse De L'Effet Des Impots Differes Sur Le Contenu Informationnel Du Resultat : Cas Des Firmes Utilisant Les Normes Internationales Et Les Normes Americaines," Post-Print halshs-00525821, HAL.
    17. Karampinis, Nikolaos I. & Hevas, Dimosthenis L., 2011. "Mandating IFRS in an Unfavorable Environment: The Greek Experience," The International Journal of Accounting, Elsevier, vol. 46(3), pages 304-332, September.
    18. Core, John E. & Schrand, Catherine M., 1999. "The effect of accounting-based debt covenants on equity valuation1," Journal of Accounting and Economics, Elsevier, vol. 27(1), pages 1-34, February.
    19. Barth, Mary E. & Beaver, William H. & Landsman, Wayne R., 1998. "Relative valuation roles of equity book value and net income as a function of financial health," Journal of Accounting and Economics, Elsevier, vol. 25(1), pages 1-34, February.
    20. Juan Manuel García Lara & Beatriz García Osma & Araceli Mora, 2005. "The Effect of Earnings Management on the Asymmetric Timeliness of Earnings," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 32(3‐4), pages 691-726, April.

    More about this item

    Keywords

    Earning Per Share (EPS); Book Value; Systematic Risk; and Equity Valuation; Manufacturing Company;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sek:iacpro:4106521. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klara Cermakova (email available below). General contact details of provider: https://iises.net/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.