Abstract:
The objective of this research is identifying the best measurement and
provides suggestions to predict the stock return in Sri Lanka considering the
listed manufacturing companies of Colombo stock exchange. Economic value
added (EVA), Net Profit (NP), and Net Operational Profit after Tax (NOPAT)
is independent variables, and stock return is dependent variable in this study.
Data collected from using annual reports of 20 manufacturing companies for
the period of 2010 to 2016. The findings show that there is a positive
relationship between the stock return and all the independent variables.
NOPAT is the most important measure in predicting the stock return. Further
this study suggested that random effect model should be accepted and then it
explain that differences among entities have some influence on the dependent
variable. Accounting measures are better in predicting stock return than EVA.
