Owners’ Equity and Accounting Information Relevance

The paper examines the influence of equity ratio on the value relevance of earnings and book value for Jordanian industrial companies from 1992 to 2002. The findings show that equity ratio significantly influenced the value relevance of individual book value but not earnings. In their combination, the paper indicates that share prices respond more to book value than earnings. Our findings might increase the valuation practices understanding of financial statements users and provide fundamentals for future studies that aim to examine our hypotheses in more details.