JOURNAL OF ACCOUNTING AND FINANCE
A Statistical Inquiry into the Correlation of Income and Balance Sheet Metrics on Equity Valuation
Author(s): Manuel G. Russon, Vipul Bansal
Citation: Manuel G. Russon, Vipul Bansal, (2018) "A Statistical Inquiry into the Correlation of Income and Balance Sheet Metrics on Equity Valuation", Journal of Accounting and Finance, Vol. 18, ss. 5, pp. 170-174
Article Type: Research paper
Publisher: North American Business Press
Abstract:
Financial analysts, portfolio managers and investment bankers seeking to assess over- or undervaluation of securities often use metrics such as price to earnings, price to cash flow, price to sales, price to book value ratios and others. Time series correlations of equity price to earnings per share, cash flow per share and book value per share is analyzed for 1500 companies. Book value per share appears to have the highest correlation in the aggregate, on a sector basis and on a market capitalization basis