Value Relevance of Book Value, Accounting Earnings and Operating Cash Flows in Explaining Security Prices of Thai Listed Companies During the COVID-19 Situation
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Abstract
The objectives of this research are to study, compare and test the difference of the value relevance of book value, accounting earnings, and operating cash flows in explaining security prices between before and during the Coronavirus Disease 2019 situation. The study periods are from the 1st quarter of 2019 to the 3rd quarter of 2020. Totally 350 companies are included in the study. Descriptive statistics, correlation analysis, regression analysis, and differential analysis are used in the data analysis. Research results show that during the COVID-19 situation book value has the highest value relevance with security price, followed by cash flow from operation and accounting earnings. Whereas, before the COVID-19 situation, accounting earnings has the highest value relevance, followed by book value and cash flow from operation. When considering the incremental value relevance of the accounting information, it can be confirmed that the value relevance of accounting earnings declines, whereas the value relevance of operating cash flow increases and higher than accounting earnings. In addition, the results of the differential analysis conclude that the COVID-19 situation has an impact on the value relevance of book value, accounting earnings, and cash flow from the operation of Thai listed companies to differ from the pre-situation.
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