Earnings Persistence In Affecting Stock’s Prices Of Malaysia And Indonesia Manufacturing Companies

Abstract

The users of financial reports usually use the information of current earnings to predict future earning so that quality earnings are earnings that can reflect the continuity of earning in the future..
 This study takes company samples of manufacturing companies, both of which listed in Indonesia’s stock exchange as well as Malaysia’s in the yeas 2014 – 2017 by using regression and intervening analysis. The results of this study are operating cash flow cannot affect the earnings’ persistence in Indonesia but it affect in Malaysia, book tax differences and debt level can affect an earning persistence in Indonesia & Malaysia, earnings persistence could affect stock prices in Indonesia & Malaysia and Operating cash flow cannot affect stock prices with Earning Persistence as intervening variable for manufacturing companies in Indonesia & Malaysia.
 Research Limitations/implications: Adj R square value is very low and cannot be compared between Indonesia and Malaysia.
 Practical Implication: the result would be beneficial for researchers who eager to analyse the similar variable against different countries.

Financial Leverage, Firm Size, Company Age, and Earning Persistence: Evidence From Indonesia

“…The more persistent the earnings, the more appreciative the investors are (Canina & Potter, 2019). Indeed, the virtuous responses from the market occur, reflected by a positive relationship between PP and firm value with its measurements, like stock return (Adityanur & Mardijuwono, 2020;Malau, 2019;Ramadhani & Sadikin, 2018) and share price (Rokhmania & Kartika, 2021). Because of two exciting issues, this study wants to reveal the determinants of profit persistence.…”

“…Several researchers attempted to associate profits persistence with financial leverage by utilizing the capital market data from China (Gong et al, 2021), Indonesia (Gunawan et al, 2020;Lestari & Harymawan, 2020;Nurdiniah et al, 2021;Sabila et al, 2021), Malaysia (Ha et al, 2020), Malaysia and Indonesia (Rokhmania & Kartika, 2021), the United States (Karim & Sarkar, 2020), and Vietnam (Dang & Vu, 2022;Khuong et al, 2022). Unfortunately, the research evidence to prove the relationship between financial leverage and earnings persistence still conflicts.…”