UTJECAJ PANDEMIJE COVID-19 NA VRIJEDNOSNU VAŽNOST DOBITI I NOVČANIH TOKOVA
IMPACT OF THE COVID-19 PANDEMIC ON THE VALUE RELEVENCE OF EARNINGS AND CASH FLOWS

Summary/Abstract: Value relevance studies examine the importance and reliability of accounting information and represent a separate direction of accounting research. Value relevance can be interpreted as the degree of statistical connection between accounting information and stock prices, which is determined by applying the Feltham-Ohlson (1995) model. The crisis caused by the COVID-19 pandemic affected all spheres of the economy, and in this context the question that arises is how the crisis affected the information content and value relevance of accounting information. The aim of this paper is to analyze the value relevance of accounting information and to compare the value relevance of earnings and cash flows on a sample of companies listed on the Croatian capital market in the period 2016- 2020. The work will determine the differences in the value relevance of earnings presented through the profit and loss account and the cash flows presented in the cash flow statement. Also, the impact of the crisis caused by the COVID-19 pandemic on value relevance will be determined. In order to get a better insight into the issues of the research, the time period is divided into the pre-crisis period and the crisis period. The research was conducted on a sample of companies that were listed on the Croatian capital market and that were actively traded in the observed period. In the years before the crisis (period 2016-2018), the sample includes a total of 105 observations, and in the crisis years (period 2019-2020), the sample consists of 70 observations.

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