| This study’s primary objective is to determine the value relevance of operating performance, represented by earnings per share (EPS), cash flow from operations (CSH) and book value of equity (BVE) during the GST and SST indirect tax periods. |
| This study’s primary objective is to determine the value relevance of operating performance, represented by earnings per share (EPS), cash flow from operations (CSH) and book value of equity (BVE) during the GST and SST indirect tax periods. The Ohlson (1995) model was used to determine the market value-relevance. We used Ordinary Least Squares (OLS) regression to examine the hypotheses constructed based on 249 non-financial listed firms from the manufacturing and service sectors on the Malaysian Market from 2015 to 2019. Based on the combined 1,245 firm observations of Goods and Services Tax (GST) and Sales and Services Tax (SST) periods, the outcome reveals the existence of significantly positive relationships between EPS, CSH and BVE and share price (SHP). The findings suggest that EPS, CSH and BVE were the accounting information adopted by investors to decide on any investments during the indirect tax periods. In addition, by regressing separately GST and SST indirect tax period by utilising 498 firm-year observations, we find only EPS and CSH are positive and significant to SHP. This study has implications for academics, industrialists, regulators and investors, that EPS and CSH validated value relevance of operating performance during the GST and SST indirect tax periods. |
