The Value Relevance of Earnings, Book Values, and Cash Flows: Special Reference to Non Financial Sector, Evidence from Sri Lanka Rauf Ahamed Lebbe Abdul*, Randika P.A.D.D.* * Department of Accountancy and Finance, South Eastern University of Sri Lanka Online published on 25 October, 2016. Abstract This research investigated that the value relevance of earnings, book value and cash flow is to provide empirical evidence concerning the value relevance of accounting information such as earnings per share (EPS), asset book value (ABV), and operating cash flow (OCF) to share price (SP) of non-financial companies listed on the S&P SL20 index in Colombo stock exchange (CSE) in the period of 2011–2015. For conducting this research, data were collected from secondary sources, mainly from financial reports of companies selected from the S&P SL20 index. For this purpose descriptive, correlation, and multiple regression analysis was employed. The findings of this research, the multiple regression analysis, Adjusted R square revealed that earnings per share, asset book value and operating cash flow are 84.9% impact on the share price. Also earnings per share significantly impact on share price while asset book value and operating cash flows are not significantly impact on share price. The correlation analysis revealed that earnings per share has a strong positive relationship with share prices, asset book value has a weak negative relationship with share price and operating cash flow has weak positive correlation with share price. Based on these findings, it is suggested that the focus of investors should be on earnings, cash flow and while less emphasis be placed on book values. Top Keywords Value relevance, share price, Earning, book value. Top |