Role of Accounting Information in Assessing Stock Prices in Bangladesh


  • Nazmul Hassan East West University
  • Hasan Md. Mahmood Ul Haque Independent University, Bangladesh (IUB)



Book Value (BV), Earnings per Share (EPS), Value Relevance.


This paper seeks to explore the relationship between share prices and the value-relevance of accounting information. The basic Ohlson (1995) valuation model has been used to conduct the research using a sample of 93 companies from six broad industries listed on the Dhaka Stock Exchange (DSE), Bangladesh. The adjusted (R²) and estimated regression coefficients of accounting variables are tested in this model. Results report that both Earnings per Share (EPS) and Book Value (BV) have influential power in determining share prices. But, results of the individual effect of EPS and BV to determining share price indicate that the EPS played an increasingly considerable role in projecting share prices than that of BV. Thus, EPS has become more informative to equity investors in predicting the share prices.

Author Biographies

  • Nazmul Hassan, East West University
    Department of Business Administration
  • Hasan Md. Mahmood Ul Haque, Independent University, Bangladesh (IUB)
    School of Business, Lecturer


Abayadeera, N. (2010). Value Relevance of Information in Hi-tech Industries in Australia: Accounting Information and Intangible Asset Disclosures. Global Review of Accounting and Finance, 1(1), 77-99.

Beisland, L. A. (2009). A Review of the Value Relevance Literature. The Open Business Journal, 2, 7-27.

Chen, C. J., Chen, S., & Su, X. (2001). Is accounting information value-relevant in the emerging Chinese stock market? Journal of International Accounting, Auditing and Taxation, 10(1), 1-22.

Collins, D. W., Maydew, E. L., & Weiss, I. S. (1997). Changes in the value-relevance of earnings and book values over the past forty years. Journal of Accounting and Economics, 24(1), 39-67.

Francis, J., & Schipper, K. (1999). Have Financial Statements Lost Their Relevance? Journal of Accounting Research, 37(2), 319.

Glezakos, M., Mylonakis, J., & Kafouros, C. (2012). The Impact of Accounting Information on Stock Prices: Evidence from the Athens Stock Exchange. International Journal of Economics and Finance, 4(2).

Gjerde, O., Knivsfla, K., & Saettem, F. (2008). The value-relevance of adopting IFRS: Evidence from 145 NGAAP restatements. Journal of International Accounting, Auditing and Taxation, 17(2), 92-112.

Khanagha, J. B., Mohamad, S., Hassan, T., & Sori, Z. M. (2011). The impact of reforms on the value relevance of accounting information: Evidence from Iran. African Journal of Business Management, 5(1), 96-107.

Mostafa, W. (2016). The value relevance of earnings, cash flows and book values in Egypt. Management Research Review, 39(12), 1752-1778.

Mondal, M. S. A., & Imran, M. S. (2010). Determinants of stock price: a case study on Dhaka stock exchange. International Journal of Finance, 2(3), 1-16.

Ohlson, J. A. (1995). Earnings, Book Values, and Dividends in Equity Valuation. Contemporary Accounting Research, 11(2), 661-687.

Pirie, S., & Smith, M. (2008). Stock prices and accounting information: evidence from Malaysia. Asian Review of Accounting, 16(2), 109-133.

Ragab, A. A., & Omran, M. M. (2006). Accounting information, value relevance, and investors’ behavior in the Egyptian equity market. Review of Accounting and Finance, 5(3), 279-297.

Shamy, M. A., & Kayed, M. A. (2005). The value relevance of earnings and book values in equity valuation: An international perspective ‐ The case of Kuwait. International Journal of Commerce and Management, 15(1), 68-79.

Shubiri, F. N. (2010). Analysis the Determinants of Market Stock Price Movements: An Empirical Study of Jordanian Commercial Banks. International Journal of Business and Management, 5(10).