Earnings persistence, earnings power, and equity valuation in consumer goods firms

Nurani Fatma, Widi Hidayat

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)

Abstract

Purpose: The purpose of this paper is to examine the influence of earnings persistence and earnings power on equity valuation. Design/methodology/approach: The purposive sampling method was applied to determine the samples of selected 100 firms. This study employed secondary data obtained from the annual reports and financial statements of consumer goods firms listed on the Indonesian Stock Exchange for the period 2010–2014. The analysis technique used a multiple regression analysis. Findings: The study result shows that, partially, earnings persistence and earnings power affect equity valuation by investors. Earnings persistence has a negative influence, whereas earnings power has a positive influence on equity valuation. Originality/value: This study throws additional lights on equity valuation specific to consumer goods industries.

Original languageEnglish
Pages (from-to)3-13
Number of pages11
JournalAsian Journal of Accounting Research
Volume5
Issue number1
DOIs
Publication statusPublished - 11 Dec 2019

Keywords

  • Consumer goods firms
  • Earnings persistence
  • Earnings power
  • Equity valuation

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