had conducted reasearch on banking industry with the reason for banking industry to be more regulated than other industries. Also, manufacturing industry
has more judgment on considering certain factors of additional financing source.
1.4 Research Questions
1. Do earnings have value relevance towards stock performance with non-
linear relationship? 2.
Does book value have value relevance towards stock performance with non-linear relationship?
3.
Does debt have value relevance towards stock performance with non- linear relationship?
1.5 Objectives of Research
1. The research is conducted to examine the value relevance of earnings
towards stock performance with non-linear relationship 2.
The research is conducted to examine the value relevance of book value towards stock performance with non-linear relationship
3. The research is conducted to examine the value relevance of debt towards
stock performance with non-linear relationship
1.6 Benefit of Research
1. For the academician, as the training to participate into accounting research
area and also increase the knowledge of value relevance of accounting information
2. For UNIMED, as the addition research of the accounting area especially
the relevance of accounting information 3.
For the object, as the revaluation of the related standards of accounting information that could increase its value and assist the related user
CHAPTER V CONCLUSION AND SUGGESTION
5.1 Conclusion
From research analysis and discussion which has been elaborated before and based on data obtained from research as which has been discussed in this
thesis, hence the conclusion are as follows. 1.
Earnings has no value relevance towards stock performance with non- linear relationship.
2. Book value has no value relevance toward stock performance with non-
linear relationship. 3.
Debt has no value relevance towards stock performance with non-linear relationship.
4. From the partial test, non-linear relationship of earnings, book value, and
debt toward stock performance is not significant. However, the non-linear model still has better explanatory power than linear one. It could observe
by the coefficient determination arise when using non-linear model.
5.2 Limitation
The research has limitation as follow: 1.
The research do not observe the value relevance of cash flow. Few researches have compared between earnings and cash-flow though Stice et
al 2007 stated that earnings provides a better indication of firm performance than cash flow. It is also supported Dechow 1994 earnings
are more strongly associated with stock return over short measurement. however, cash flow improves when the interval is lengthened.
2. The research do not unticipated the macro factors that might interfere on
the capital-market research. 3.
The research do not make comparison for the interval length since Brimble and Hodgson 2005 found that both on linear and non-linear model of
value relevance studies, R
2
increased with the additional interval length. 4.
The research to make comparison between financial and non-financial industries, since Djadmiko 2005 conducted research on financial
companies and this research on manufacturing companies, lead into different result.
5.3 Suggestion
Based on conclusions explained before and research findings, hence submitted suggestions as follows.
1.
Suggestion for next researcher to observe the other accounting information e.g., value relevance of cash flow.
2.
Suggestion to anticipate the macro factors on value relevance studies
3.
Suggestion to make comparison for the interval length 4.
Suggestion to make comparison between financial and non-financial industries
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