The value relevance of the difference between nonfinancial and financial measures

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dc.contributorCook, Douglas O.
dc.contributorJohnson, Peter M.
dc.contributorLee, Junsoo
dc.contributorReitenga, Austin L.
dc.contributor.advisorTaylor, Gary
dc.contributor.authorCosgrove, Megan
dc.contributor.otherUniversity of Alabama Tuscaloosa
dc.date.accessioned2017-03-01T16:57:06Z
dc.date.available2017-03-01T16:57:06Z
dc.date.issued2013
dc.descriptionElectronic Thesis or Dissertationen_US
dc.description.abstractExtant accounting research has focused on the value relevance of nonfinancial performance measures and financial performance measures separately. I examine the value relevance of the difference in those performance metrics. Specifically, I examine whether a difference in nonfinancial and financial information is an indicator of stronger or weaker future firm performance. Additionally, I examine whether the significant difference between nonfinancial and financial measures and future firm performance is related to the life cycle stage of the firm. Finally, I examine whether these differences have an impact on market participants' assessment of firm value. My results suggest that the difference between nonfinancial and financial performance measures is an indicator for future firm performance. Specifically, the higher the difference in performance measure the weaker the future performance of the firm. However, this difference is somewhat mitigated given the various life cycle of the firms. For the mature firms the difference between nonfinancial and financial measures serves as an indicator for future performance, while a firm in the early or growth stage the difference is not a strong indicator of future performance. Additionally, I find that market participants do not impound the difference between nonfinancial and financial measures into their assessment of firm value. This finding supports both proximity and transparency theory as it relates to how these differences are communicated to financial statement users. Given that the difference between nonfinancial and financial provides a signal of future performance suggests that a trading strategy may be implemented to earn future abnormal returns. I develop a trading strategy by taking a long (short) position in firms with a low (high) difference between their nonfinancial and financial performance measures and find significant positive abnormal returns.en_US
dc.format.extent84 p.
dc.format.mediumelectronic
dc.format.mimetypeapplication/pdf
dc.identifier.otheru0015_0000001_0001483
dc.identifier.otherCosgrove_alatus_0004D_11704
dc.identifier.urihttps://ir.ua.edu/handle/123456789/1946
dc.languageEnglish
dc.language.isoen_US
dc.publisherUniversity of Alabama Libraries
dc.relation.hasversionborn digital
dc.relation.ispartofThe University of Alabama Electronic Theses and Dissertations
dc.relation.ispartofThe University of Alabama Libraries Digital Collections
dc.rightsAll rights reserved by the author unless otherwise indicated.en_US
dc.subjectAccounting
dc.titleThe value relevance of the difference between nonfinancial and financial measuresen_US
dc.typethesis
dc.typetext
etdms.degree.departmentUniversity of Alabama. Culverhouse School of Accountancy
etdms.degree.disciplineAccounting
etdms.degree.grantorThe University of Alabama
etdms.degree.leveldoctoral
etdms.degree.namePh.D.
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