Balanced scorecard equity valuation model

Abstract

This paper develops an improved equity valuation model that predicts firm's market value using firm's Balanced Scorecard (BSC) metrics. It is developed in response to the declining association between market value and, book value and earnings. A 10-year data of 300 firms listed on Bursa Malaysia Main Market was selected as sample. The data of market value and BSC measures were transformed into their natural log form (ln) in order to obtain normal and compatible data. The model shows that BSC better explains the market value than the conventional models.

Quality of Accounting Reporting After the IFRS Adoption in Nigeria

“…For data to be normal it should be skewed between -1 and 1 (Kadri et al, 2010). Table 1 Note: SP=share price three months after the financial year end t, ret = stock return three months after the end of fiscal year, ni = net income for firm i at the period t, Δni = change in net income for firm i at the period t and t-1, , te = total expenses for firm i in a fiscal year end, Δte=change in total expenses for firm i in a fiscal year end t, size = log of assets for firm i at the period t, and lev = current assets/current liabilities.…”

Untitled

“…One of the most significant aspects of regression is the assumption of the normal distribution (Hair et al, 2007). For data to be normal it should be skewed between -1 and 1 (Kadri et al, 2010).…”