ISSN: 2225-8329
Open access
This study aims to investigate the impact of accounting indicators which are the return on assets, return on equity and earnings per share in addition to growth which is measured by sustainable growth rate on the market value which is measured by market share price, stock return and by market value to book value. By the application on the Jordanian Banks from 2002 to 2011, by using the simple regression test, and by using the least squares method, it was clear that all current accounting indicators and the current growth have a positive impact on the market share price and the market value to book value, and there is no effect of the current accounting indicators and the current growth on the stock market return. It also clear that there is a positive impact of future accounting indicators and the future growth on the market value depending on all of market value measurements, and that the best explanatory accounting indicators for the changes in the market value of the Jordanian banks is earnings per share.
Al-Khalayleh, M. (1999). "The Association between Earnings and Stock Returns Using Longer Return Periods", Vol. 26, No. 2, pp. 358-365.
Al-Khalayleh, M. (2001). "The Association between Market Based Performance Measures and Accounting Performance Measures in the Long Run", Journal of Dirasat, Vol. 28, No.1, pp. 93-110.
Ball, R., and Brown, P. (1968). "An Empirical Evaluation of Accounting Income Numbers", Journal of Accounting Research, autumn, pp. 159-178.
Ben Naceur, Samy., Goaied, Mohamed (2002). "The relationship between dividend policy, financial structure, profitability and firm value", Applied Financial Economics, Vol. 12, pp. 843-849.
Debi'e, M., Abu Nassar, M. (2001). "Do Share Prices Lead Earnings in Reflecting Value-Relevant Information?", Journal of Dirasat, Vol. 28, No.1, pp. 54-67.
Gibson, Charles H., (1992). Financial Statement Analysis, Fifth Edition, South- Western Publishing Co.
Hanlon, J. O. (1991). "The relationship in Time between Annual Accounting Returns and Annual Stock Market Returns in the UK", Journal of Business Finance and Accounting, Vol.18, No.3, pp. 305-314.
Lambert, R. A., Larcker, D. F. (1987). "An Analysis of the Use of Accounting and Market Measures of Performance in Executive Compensation Contracts", Journal of Accounting Research, Vol. 25, pp. 85-125.
Olson, G. T., Pagano, M. S. (2005). "A New Application of Sustainable Growth: A Multi-Dimensional Framework for Evaluating the Long Run Performance of Bank Mergers", Journal of Business Finance &Accounting, Vol.32, (9) & (10), pp. 1995-2036.
Palepu, K. G., Healy, P. M., Bernard, V. L. (2000). Business Analysis and Valuation, Second Edition, South Weston College Publishing.
Pandey, I. M. (2005). "What Drives the Shareholder Value?", Asian Academy of Management Journal of Accounting and Finance, Vol. 1, pp. 105-120.
Ramezani, C. A., Soenen, L., Jung, A. (2002). "Growth, corporate profitability, and value creation", Financial Analysts Journal, Vol.6, pp. 56-67.
In-Text Citation: (Altahtamouni & Alslehat, 2014)
To Cite this Article: Altahtamouni, F. R., & Alslehat, Z. A. (2014). The Impact of Accounting Indicators and Growth on the Market Value. International Journal of Academic Research in Accounting Finance and Management Sciences. 4(2), 12 – 24.
Copyright: © 2018 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode