What are financial ratios used to analyze factor affect abnormal return of stock?
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Financial ratios such as market capitalization, earnings per share, price-earnings multiples, dividend yield, and trading volume are crucial factors that influence abnormal stock returns. Studies have shown that these financial market variables play significant roles in determining stock market returns. Additionally, the impact of product innovativeness, measured by a compound product innovativeness score (CPIS), has been found to explain a substantial portion of abnormal financial returns in market valuation. Furthermore, the use of characteristic-based benchmarks derived from market-wide regressions of firm returns on lagged firm characteristics has been proposed as a useful tool for assessing abnormal returns in various stock events. These findings highlight the importance of analyzing financial ratios and product innovativeness in understanding and predicting abnormal stock returns.
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| Long-term operating accruals, especially when asset and liability components are separated, affect abnormal returns of stock, leading to significant annual returns and reduced portfolio risk during economic crises. | |
3 Citations | Financial ratios are not directly addressed in the paper. |
| The compound product innovativeness score (CPIS) is used to explain abnormal financial returns, with new-to-the-market novelty significantly impacting firm value compared to new-to-the-firm innovation. | |
| Financial ratios such as market capitalization, earnings per share, price-earnings multiples, dividend yield, and trading volume impact stock market returns, as per the study on Bursa Malaysia. |
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