An Investigation of Relationship between Earnings Conservatism and Price to Book Ratio Based on Basu’s Method

An Investigation of Relationship between Earnings Conservatism and Price to Book Ratio Based on Basu’s Method

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One of the most important concepts in financial statement analysis and evaluation is conservatism.Thus recognition of the factors which influence conservatism can considerably help the investor in managing the selection of more click here conservative assets properly and avoiding the untrue exposure of financial statements.This research is about to consider the relation of effective factors on organizations’ conservatism that one of them is the portion of shares’ market value to shares’ book value.

Data was collected ethical nutrients mega magnesium powder citrus 450g from annual reports of listed companies on Tehran Stock Exchange during 2003-2009.The results of the study revealed that there was no significant relationship between earnings conservatism and price to book ratio.