Relationship between earnings quality and stock price return from the perspective of Bangladesh capital market

Abstract

The report contains 3 segments which are quite explicated. The first segment of this report contains information about the internship profile. The candidate in this segment describes information about the internship tenure, the benefits and challenges that the intern has faced. I am also going to share my contribution towards the organization and some learning activities in my internship tenure . The second part of this report is the organization part where I will be describing about BRAC EPL Investments Limited. Firstly this section talks about the business model of merchant banks and drivers of revenue generation. Followed by that I will highlight information regarding each department of BEIL i.e human resources, marketing practice , operations and information system. This section also showcases the record transactions of BEIL over the years. Organogram of the company is presented. Recruitment planning, leadership style , performance appraisal , development initiatives are some key points that are discussed under the management practices. 4P’s of marketing mix which are product ,place, price, and promotion also discussed here. In addition it is imperative to assess the financial performance of the company. Profitability , liquidity and market value ratios have been calculated for BEIL. The third section of this report is the project report. I wanted to test the relationship between Earnings Quality and stock return using regression analysis. The reason that I have chosen this is because little research have been done in retrospect to the stock market of Bangladesh. The formula for EQ is net operating cash flow/net income. EQ is considered as the independent variable whereas adjusted stock price return is the dependent variable. Adjusted stock price refers to the state that shares of companies are deemed as constant from 2016 to 2022 even though if the company issued stock dividend. Size of the firm and debt ratio are controllable variables. Based on my analysis , results show that EQ does not have a strong influence on stock price return. The probable causes of such result are also discussed.