Measure and compare the explanatory power of value added, profits and cash flows from operations in predicting stock returns and determine the appropriate model

Document Type : Original Article

Author
Abdossamad Khalatbari Limaki
Ph.D. graduate in accounting IAU, Science and Research Branch
Abstract
Investors may be faced with a variety of opportunities for investment. All those who are looking to put their resources to work in parts with equal risk, the highest returns ever will. The basic question is whether the proper measure of corporate performance evaluation is favorable to investors in identifying investment opportunities to help. Different kinds of indicators are used for evaluating the performance of the companies. In this study, three indicators: indicators based on value, profit-based indicators and indicators based on the liquidity, return factors have been investigated. The population in this study, the companies listed in Tehran Stock Exchange (TSE) during the years 1380 to 1387.The results show that at 95% confidence level, the top three categories of meaningful relationship with their returns. Finally, a model for the determination of stock returns using a variety of indicators is presented.
Keywords
value added
profits
Cash flow from operations
Stock Returns