Growth Potential of Publicly Traded Brazilian Companies: Accounting and Market Overview

Abstract

The proposal of this paper is to check the relevance of accounting information through factors that affect the growth potential (GP) of the non-financial Brazilian publicly owned companies from 2002 to 2012. The target is to identify which variables that better capture the GP and check the impact of adopting International Financial Reporting Standards (IFRS), confront the accounting vision against market vision. The results signalize that the GP is measured better with market information and that IFRS’s quality of information is not enhanced. For the market, size, indebtedness and the return on assets have been relevant to measure the GP while in the accounting vision, size is not relevant.

Keywords

• accounting variables
• growth potential
• international standards
• market variables
• value relevance