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Fundamental Analysis and Human Capital Empirical Evidence on the Relationship between the Quality of Human Resources and Fundamental Accounting Variables

Fundamental Analysis and Human Capital Empirical Evidence on the Relationship between the Quality... Fundamental analysis is aimed at assessing the intrinsic value of companies based on publicly available accounting information. Thus, the main purpose of fundamental analysis research should be identifying the main determinants of value, establishing empirical relations between them and fundamental accounting variables, and finally, predicting the future behavior of such variables to estimate the value of the firm. Traditional fundamental analysis ignores the existence of some intangible assets, such as intellectual capital, that are currently considered as the main determinants of value. Human capital is an essential component of intellectual capital. This paper provides evidence on the extent to which the quality of human resources is related to the value of accounting variables that are used in fundamental analysis due to their perceived usefulness as proxies for investors' expectations on the firm's future profitability and growth in both, earnings and shareholders' equity. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Human Resource Costing & Accounting Emerald Publishing

Fundamental Analysis and Human Capital Empirical Evidence on the Relationship between the Quality of Human Resources and Fundamental Accounting Variables

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1401-338X
DOI
10.1108/eb029063
Publisher site
See Article on Publisher Site

Abstract

Fundamental analysis is aimed at assessing the intrinsic value of companies based on publicly available accounting information. Thus, the main purpose of fundamental analysis research should be identifying the main determinants of value, establishing empirical relations between them and fundamental accounting variables, and finally, predicting the future behavior of such variables to estimate the value of the firm. Traditional fundamental analysis ignores the existence of some intangible assets, such as intellectual capital, that are currently considered as the main determinants of value. Human capital is an essential component of intellectual capital. This paper provides evidence on the extent to which the quality of human resources is related to the value of accounting variables that are used in fundamental analysis due to their perceived usefulness as proxies for investors' expectations on the firm's future profitability and growth in both, earnings and shareholders' equity.

Journal

Journal of Human Resource Costing & AccountingEmerald Publishing

Published: Jan 1, 2000

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