Determination and comparison of relative and incremental information contents of income statement information and balance sheet on stock return prediction

Managers, investor and other stake holders, use financial statement to assess and evaluate the performance. So for many studies on the usefulness of accounting information on decision makings of users of financial statement has been carried out. For example it can be noted that many studies considered the relationship between different variables of accounting and return or price of stoke. This Research concerns with the determination and comparison of the relative and incremental information content of the balance sheet and income statement information. Also for this purpose, there relationship between stock return and accounting variables for manufacturing companies’ listed in Tehran Stock Exchange during the period 2008 to 2012 is considered. Results of this research indicates correlation relation of net income and partial adhesion of operating income in relation with the stock return and also not correlation of debt to equity ratio relation with dependent variable. So net income has relative information content toward the other two variables Also results of this research are indicators of having information content of net income toward the other two variables.