Prediction Of The Profitability Of Shares Of Peruvian Companies Listed On The Stock Exchange Using Financial Statement Ratios: Evidence From The Lima Stock Exchange (Bvl).

Abstract

This study examines the predictive capacity of financial statement ratios for stock profitability among firms listed on the Bolsa de Valores de Lima (BVL). Drawing on the theoretical foundations of value relevance, market efficiency, and accounting-based valuation models, the analysis investigates whether profitability and valuation ratios systematically explain subsequent stock returns in an emerging market context. Using panel-based econometric techniques, the study evaluates the relationship between return on assets (ROA), return on equity (ROE), price-to-earnings (P/E), and price-to-book (P/B) ratios and firm-level stock performance. The findings indicate that accounting profitability measures exhibit statistically significant predictive power for future returns, suggesting that financial statement information retains incremental value in equity pricing within the Peruvian market. Valuation ratios further capture cross-sectional variation in performance, consistent with asset-pricing and fundamental risk factor frameworks. The results also provide evidence of partial return persistence, implying that market efficiency may be constrained by institutional and structural characteristics typical of emerging economies. This study contributes to the international accounting literature by extending evidence on the value relevance of financial reporting to Latin America and by highlighting the continued importance of accounting fundamentals in capital market analysis. The findings offer implications for investors, regulators, and policymakers seeking to enhance transparency, efficiency, and informed decision-making in emerging financial markets.