TY  - JOUR
T1  - Value Relevance of Financial Performance Measures under IFRS:
An Analysis of Eurpean Listed Companies
AU - Rizzato, Fabio AU - Busso, Donatella AU - Devalle, Alain 
JO  - International Business Management
VL  - 13
IS  - 3
SP  - 101
EP  - 118
PY  - 2019
DA  - 2001/08/19
SN  - 1993-5250
DO  - ibm.2019.101.118
UR  - https://makhillpublications.co/view-article.php?doi=ibm.2019.101.118
KW  - Financial
KW  -performance measure
KW  -value relevance
KW  -IFRS
KW  -net income
KW  -annual report
AB  - The aim of this research is to analyse the value relevance of the most common financial performance
measures (Sales, EBITDA, EBIT, EBT, net income and total comprehensive income) using the value relevance
methodology. The general regression model was applied according to two different approaches, each of which used
with different variations in order to verify what financial performance measures can affect stock market
capitalisation (and how they behave) according to the econometric model used. Specifically with the first approach
we analysed data using an OLS Model with both pooled and panel datasets. In the second approach, we created
models for the dataset to obtain a dynamic panel which we analysed using both the OLS and the GMM regression
models. The sample consists of listed companies on the main European stock market indices (France, Germany,
Italy, Spain, UK) for the period 2008-2013, totalling 175 groups analysed and 1.225 overall observations
processed for each year (7.350 items overall). Results show that net income is the most value relevant financial
performance measure, irrespective of the econometric model used. The issue is extremely topical, considering the
IASB debate about introducing the EBIT as a mandatory sub-total in the income statement in order to satisfy user’s
needs.
ER  -