The Informational Content for the Accounting Profit Measurements and its Relations to the Earning per Share in the Jordanian Public Shareholding Industrial Companies: An Empirical Study (2006-2013)

Abstract

This study aims to find out the relationship between the informational content for the accounting profit measurement (the percentage return on investment, working capital, the operating profits and earnings per share). For 8 consecutive years (2006-2013), this study had continued and it comprised of 30 industrial companies from the community's total 69 industrial companies listed in the Amman stock exchange market for the year (2014), this study showed no statistically significant relation to the variable working capital ratios factor in earnings per share. Meanwhile the other variables (percentage return on investment and operating profits percentage) had valuable relationship with the earnings per share in the Jordanian Public Shareholding industrial companies; moreover the study recommended that the Company's managers must pay attention to strengthening the working capital. 1. Introduction The financial statements are considered based on the First international accounting standard as the structural financial display for the facility's financial center and the operation it performs, and the financial statements goals concerning the general purpose by providing information to the investors regarding the financial centers, income list, and the list of the facility property rights, its performance and cash flows in order to help them make investment decisions (Akileng, 2013). The company's expanding business, its increasing size and its activities caused an increase in the amount of authorities related to these companies, which required the need to contain the financial statements based on non-traditional information which benefits these authorities in evaluating the company's financial situations such as the accounting profit measurement, percentage profit and based on this, The various-related parties have tried to find formulas and percentages and analyze the financial statements such as (percentage return on investments, and working capital percentage, proportions of operating profit and earnings per share) in order to judge the performance of the enterprise and management (Ahmed and Kassar, 2009). The accounting profit measurements and profits are considered one of the most used means to identify the contents of the financial statements by its users. As it concerns the various parties related to the inside and outside of the company and gives an impression on the ability of the company to generate profits from sales and from funds invested, thus judging the efficiency of the company's directors to manage and invest funds (Martani et al., 2009). Therefore this study was done to identify the informational content for the accounting profit measurement and its relations to the earning per share in the Jordanian Public Shareholding industrial companies.