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The IUP Journal of Accounting Research and Audit Practices:
Accounting Numbers as a Predictor of Stock Returns: A Case Study of NSE Nifty
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In order to survive and grow in the global economy, it is necessary to know the factors affecting the capital market. This study is carried out to see how this phenomenon is taking place in India. It is an attempt to predict investors' return through company financial analysis. Company analysis is the last leg in the economy, industry, company analysis sequence, which interprets a company's past and present financial health and predicts its future condition. The study findings indicate that the ratios are not the best predictors to choose a company in a portfolio or for investing in a particular company, as the profitability of the company can be affected by several other factors.

 
 
 

Fundamental analysis is essential for market efficiency; it involves two different approaches in the search for mispriced securities. The first approach involves estimating the intrinsic value and comparing the same with the prevailing market price to determine whether the security is underpriced or fairly priced or overpriced. The second approach involves estimating a security's expected return, given its current price and intrinsic value and then comparing it with the appropriate return of securities with similar characteristics.

Company analysis is the last leg in the economy, industry, company analysis sequence. It can be categorized into two parts: (a) a study of financials, and (b) a study of other factors. In company analysis, investors assimilate several bits of information related to the company and evaluate the present and future values of the stock. Risk and return are associated with the purchase of stock in order to take better investment decisions. The present and future values of a company are affected by a number of factors.

 
 
 

Accounting Research and Audit Practices, Global Economy, Fundamental Analysis, Financial Lleverage, Capital Structure, Break-Even Point, Capable Management, Aabnormal Earnings, Ffunds Flow Analysis, Cash Flow Analysis, Ratio Analysis, Eeconomic Dimensions.