VALUE RELEVANCE OF ACCOUNTING INFORMATION: EVIDENCE FROM THE HEALTH CARE SECTOR

The value relevance of accounting information is a critical area of financial research, as it examines the extent to which financial statements and accounting figures influence investors’ decisions and firm valuation. This study investigates the value relevance of accounting information within the health care sector, analyzing the impact of key financial metrics such as earnings, book value, and cash flows on stock prices. Using secondary data from publicly traded health care firms, the study employs empirical models to assess the association between accounting figures and market valuation. The findings provide insights into the reliability and usefulness of accounting information for investors, policymakers, and other stakeholders in the health care industry. The study also highlights sector-specific factors that may influence the degree of value relevance, offering recommendations for improving financial reporting practices.