The value relevance of financial statements : Evidence from Vietnam

Abstract

Value relevance of financial statement has been in research for academics over the last four decades. While there has been a number of studies on the value relevance in the developed countries such as the US and UK, but very few empirical study was conducted in developing markets. Therefore, the aim of this study is to examine the value relevance of financial reporting and its impact on stock price. In order to achieve this goal, a model that includes six specific financial ratios has been developed. The sample data of 127 non-financial companies listed on HOSE, is collected primarily from their financial statements and other credible sources in the time fames spans of 2008 - 2013. The results reveal that inventories to sales ratio, working capital to total assets ratio have a negative impact on stock return, while the ratio of net profit to total assets and net profit to sales ratio affect stock price movement positively