Table 2 Formulas of the financial metrics used in this study
Ratios | Formulas | References |
|---|---|---|
MVA | Total Market Value / Total Capital Employed | Kim et al. (2004) |
EPS | Net Income Available to Shareholders / Number of Shares Outstanding | Chen et al. (2007) |
Market to Book | Market Capitalization / Net Book Value | Stewart (2013) |
Debt Ratio | Total Liabilities / Total Assets | Omurbek and Mercan (2014) |
ROE | Net Income / Stockholders’ Equity | Livingstone and Grossman (2001) |
ROA | Net Income / Total Assets | Moyer et al. (2014) |
ALTMAN-Z | 1.2 (Working Capital / Total Assets) + 1.4 (Retained Earnings / Total Assets) + 3.3 (EBIT / Total Assets) + 0.6 (Market Value of Equity / Book Value of Total Liabilities) + 1.0 (Sales / Total Assets) | Altman and Hotchkiss (2006) |
Share Return | (Closing Share Price – Initial Share Price) / Initial Share Price | Carton and Hofer (2006) |