Value Relevance of CFO and EPS: A Pakistani Context

Muhammad Kashif Saif, Abdullah Muhammad Ibrahim, Muhammad Suhail Sharif and Umair Saeed Bhutta
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Muhammad Kashif Saif: School of Economics & Business Administration, Chongqing University, Chongqing, China
Muhammad Suhail Sharif: School of Economics & Business Administration, Chongqing University, Chongqing, China
Umair Saeed Bhutta: Wuhan University of Technology, Wuhan, China

International Journal of Economics and Empirical Research (IJEER), 2014, vol. 2, issue 3, 94-99

Abstract: The main purpose of this paper is to investigate the relative and incremental information contents of earning per share and cash flow from operation in the companies listed in Karachi Stock Exchange. This study also evaluates that whether EPS has more information content than then cash flow from operation. To achieve our objective we investigate 85 companies that are listed in Karachi Stock Exchange during the period 2008-2012. Our results indicate that EPS model is more preferable in explaining the stock return. Furthermore EPS has more information content than cash flow from operation. Our results confirm the earlier studies which have been made on different countries.

Keywords: EPS; Cash flow from operation; Information content (search for similar items in EconPapers)
JEL-codes: D21 (search for similar items in EconPapers)
Date: 2014
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