Informational value of fundamental accounting variables in asymmetric information environment

Abstract

The present study was designed and carried out in order to investigate the relationship between operating profit and operating cash flow with reaction of investors under conditions of information asymmetry. The study models are in the form of operating profit changes and cash flow changes as dependent variable and changes in the stock price as dependent variable. The study population included companies accepted in Tehran Stock Exchange and the sample consisted of 97 firms that were selected using systematic deletion method. In this study, applied research method and descriptive/correlational research methods were used in terms of objective and performance. The study was conducted from 2008 to 2012. Related data were analyzed using multiple regression technique based on panel data. Results indicated effect of operating profit and no effect of operating cash flows on investors' reaction.