Impact of accounting data on share price during different economic conditions

Abstract EN

Nevertheless, many studies in several countries investigated the Impact of accounting data on share price during the global financial crisis 2007-2009 .

However, the findings of these studies revealed mixed results.

This study discusses the ability of cash flow accounting data to predict share prices of Saudi Arabia’s listed companies.

The study covers three different periods of the Saudi economy; before, during, and after the global financial crises.

Quarterly data used in this study were collected from the financial statements of non-financial companies listed on the Stock Exchange of Saudi Arabia from 2007 to 2010.

The findings indicate that share prices can be predicted by cash flow ratios before, during, and after the economic crises.

The results also show that cash flow return on equity (CFROE) and cash flow short term liabilities (CFSTL) cannot predict the changes in the share prices for all the three periods.

In contrast, price cash flow per share (PCFPS) and assets efficiency ratio (AER) are found to be good predictors of the variations in the stock price for all three periods.