The relevance of non-financial key performance indicators

Author

Bingxu FANG, Singapore Management UniversityFollow
Partha MOHANRAM
Dushyant VYAS

Publication Type

Report

Version

publishedVersion

Publication Date

1-2020

Abstract

The limitations of financials statements in assessing firm performance have long been known to the academic and practitioner accounting communities. Recent years have witnessed a sharp increase in the frequency and scope of non-financial Key Performance Indicators (KPIs) disclosed by companies and used by market participants. In this study, we investigate the relevance of various voluntarily reported non-financial KPIs. We find that KPIs are positively associated with future profitability, sales growth, and current stock returns; however, the stock market underreacts to the information embedded in KPIs for firms operating in opaque information environments.

Discipline

Accounting

Research Areas

Financial Intermediation and Information

First Page

1

Last Page

24

Citation

FANG, Bingxu; MOHANRAM, Partha; and VYAS, Dushyant. The relevance of non-financial key performance indicators. (2020). 1-24.
Available at: https://ink.library.smu.edu.sg/soa_research/1951

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.