The effect of firm size, financial ratios and cash flow on stock return

Yuliarti, Atika; Diyani, Lucia Ari

doi:10.14414/tiar.v8i2.1313

Cited by 14 publications

(26 citation statements)

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“…In essence, market value shows how market participants as a whole assess the value of a stock and not in terms of company size. The results of this study are in line with studies [40], where firm size cannot moderate the relationship between market value and firm value. In line with the study results [8], market value shows how the overall market behavior is assessed or reflected on the stock and not on the company's size.…”

Section: Path Coefficients Analysissupporting

confidence: 91%

The potential impact of fundamental value, market value, and firm size as moderator variable on firm value at Indonesia palm oil company

Hutauruk¹

2022

World J. Adv. Res. Rev.

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In palm oil entities on the Indonesia Stock Exchange, company size is one of the critical factors in the company's success to generate better company value. This study aims to analyze the effect of fundamental factors and market value on firm value with firm size as a moderating variable in palm oil entities listed on the Indonesia Stock Exchange for 2014 - 2020. The population in this study is oil palm plantation and processing companies. This study used purposive sampling and obtained eight companies with seven years of observation—data analysis using PLS-SEM with an error rate of 5%. Fundamental ratios have a positive but not significant effect on firm value, except market value and firm size have a positive and significant effect on firm value. Fundamental ratios have a positive and significant effect on market value. However, firm size cannot moderate the relationship between market value and firm value. Then the effect of the fundamental ratio on market value is 30.3%, and the rest is influenced by other factors, while the effect of the fundamental ratio and market value on firm value is 85.2%, and other factors influence the rest. Investors should choose issuers with higher ROA and book values. Company size does not strengthen the relationship between book value and the share price of palm oil entities, where the company size is not a factor that determines investor decisions.

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Section: Path Coefficients Analysissupporting

confidence: 91%

The potential impact of fundamental value, market value, and firm size as moderator variable on firm value at Indonesia palm oil company

Hutauruk¹

2022

World J. Adv. Res. Rev.

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“…The agency theory advocated that large and highly leveraged companies are expected to have better online disclosure (Basuony et al , 2020). In addition, company performance can also be influenced by the company’s size, as large sizes have good business continuity and the ability to attract investors (Yuliarti and Diyani, 2018). Moreover, some studies showed that large companies had a significant positive influence on corporate value (Suhadak et al , 2019a; Husna and Satria, 2019).…”

Section: Methodsmentioning

confidence: 99%

The impact of internet financial reporting on Egyptian company’s performance

Hussein

Nounou²

2021

JFRA

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Purpose This study aims to examine the impact of internet financial reporting (IFR) on companies’ performances as measured by three performance indicators, namely, stock price, stock returns and company value. Design/methodology/approach A sample of 139 non-financial companies listed in the Egyptian stock exchange is used and classified as 108 IFR companies and 31 non-IFR companies. To test the research hypotheses, an independent t-test and multiple linear regression analyses are used. Findings The results indicate that there are no significant differences between IFR companies and non-IFR companies for both stock price and stock return variables. Conversely, there is a significant difference between IFR companies and non-IFR companies in the company value variable. These results imply rejecting hypotheses H1 and H4 and accepting the hypothesis of H7 that the presence of IFR has an impact on company value. The multiple regression analyses results indicate a significant relation between the scope of IFR and stock price. Likewise, between the degree of IFR and company value. Both degree and scope of IFR have an insignificant impact on stock return, which infer that applying different performance measures can reveal different conclusions. Research limitations/implications This research is a snapshot of IFR limited to a cross-sectional study and could not study the longitudinal data of internet reporting. Second, Marston and Polei (2004) contend that “weights contain an element of subjectivity, which cannot be completely avoided in the composition of such a score” (p. 297) and a variation in the disclosure index can lead to a modification in the results (Kaur and Kaur, 2020). This research applied a weighted index to measure the degree of IFR, which may affect the results and may change it if other indexes are applied. Moreover, the scores of the degree and scope of information disclosure are assumed to be similar every year due to the lack of information regarding the variations in content and presentation in the companies’ websites. Finally, the absence of a complete data set and stock prices for some companies in the sample. Practical implications To enhance the quantity and quality of IFR could be implemented through setting regulations and standards to govern IFR practices companies in Egypt. Moreover, the trade-off of the requirement of the Egyptian Financial Supervisory Authority for Egyptian companies make information available online and the secrecy culture profound in the Egyptian society (Ahmed et al., 2015) involve assigning a regulatory body for monitoring the IFR practices to ensure disseminating timely and accurate information that helps investors make rational decisions. Social implications The researchers recommend the suggestion to have an external assurance conducted by external auditors to enhance the accuracy and credibility of the IFR information. Originality/value Based on prior literature, no studies in Egypt compare between IFR companies and non-IFR companies concerning stock price and company value as measured by Tobin’s Q. Moreover, few research studies in Egypt covered the degree of IFR disclosure whilst not addressing the impact on the stock price. In addition, no prior study examined the scope of IFR disclosure in Egypt. Therefore, the research findings attribute to literature.

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“…Firm value is critical since it reflects a firm's performance and can influence investors' perceptions of that company. A strong company value will lead the market to believe in the business's current situation or future prospects [3]. The price of shares traded on the stock exchange is a measure of company value for companies that issue shares in the capital market.…”

Section: Literature Review a Corporate Values: Concepts And Theoriesmentioning

confidence: 99%

Determination of Company's Value: A Study with Investment Opportunity as a Moderator Variable

Permata¹

2022

jefms

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This research focuses on the state of a company's valuation, which is always changing. The utilized variables to estimate firm value include free cash flow and interest rates, both of which have a positive relationship with company's value. The second purpose is to investigate the current situation of investment opportunities in industrial companies that are similarly highly volatile. The availability of free cash flow indicates the interest rate has a positive relationship with the investment opportunity set. An explanatory research design is used in this study, which aims to examine the correlation between variables. The manufacturing companies that were listed on the Indonesia Stock Exchange between 2013 and 2018 are the focus of this study. Thus, data were collected from 612 units using a purposive sampling technique. The findings reveal that whereas free cash flow has a strong positive indirect effect on company value via mediating the investment opportunity set, interest rates have a negative and minor indirect effect on firm value via mediating the investment opportunity set.

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The effect of firm size, financial ratios and cash flow on stock return

Cited by 14 publications

References 0 publications

The potential impact of fundamental value, market value, and firm size as moderator variable on firm value at Indonesia palm oil company

The potential impact of fundamental value, market value, and firm size as moderator variable on firm value at Indonesia palm oil company

The impact of internet financial reporting on Egyptian company’s performance

Determination of Company's Value: A Study with Investment Opportunity as a Moderator Variable

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