EN
Assessing the Predictive Power of Customer Satisfaction for Financial and Market Performances: Price-to-Earnings Ratio is a Better Predictor Overall
Abstract
Our paper shows that based on the RMSE criteria, Price-to-Earnings ratio is a better predictor of financial and market performances of the firm than the Customer Satisfaction index (CS). This conclusion is based on the choice of five financial and seven market indicators that we consider as proxies for financial and market performances with a sample comprising eighty-six companies: Book value, dividend yield, Gross Profit Margin, Price to Cash-Flows, Price-to-Earnings, Price to Sales, Annual return, ROA, ROE, ROI, Volatility and Tobin’s Q. However, CS clearly outperforms our five benchmarks (Tobin’s Q, Price-to-Cash Flows, Price-to-Earnings, Volatility or the indicator itself) when forecasting Tobin’s Q, Volatility, ROE and ROI. In periods of volatile market such as year 2008, CS is a more stable predictor of Volatility or ROE than the indicators themselves (i.e. Volatility for Volatility, ROE for ROE).
Keywords
Details
Primary Language
English
Subjects
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Journal Section
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Publication Date
March 1, 2012
Submission Date
March 1, 2012
Acceptance Date
-
Published in Issue
Year 2012 Volume: 2 Number: 1
APA
Rostan, P., & Rostan, A. (2012). Assessing the Predictive Power of Customer Satisfaction for Financial and Market Performances: Price-to-Earnings Ratio is a Better Predictor Overall. International Review of Management and Marketing, 2(1), 59-74. https://izlik.org/JA74WS69JC
AMA
1.Rostan P, Rostan A. Assessing the Predictive Power of Customer Satisfaction for Financial and Market Performances: Price-to-Earnings Ratio is a Better Predictor Overall. IRMM. 2012;2(1):59-74. https://izlik.org/JA74WS69JC
Chicago
Rostan, Pierre, and Alexandra Rostan. 2012. “Assessing the Predictive Power of Customer Satisfaction for Financial and Market Performances: Price-to-Earnings Ratio Is a Better Predictor Overall”. International Review of Management and Marketing 2 (1): 59-74. https://izlik.org/JA74WS69JC.
EndNote
Rostan P, Rostan A (March 1, 2012) Assessing the Predictive Power of Customer Satisfaction for Financial and Market Performances: Price-to-Earnings Ratio is a Better Predictor Overall. International Review of Management and Marketing 2 1 59–74.
IEEE
[1]P. Rostan and A. Rostan, “Assessing the Predictive Power of Customer Satisfaction for Financial and Market Performances: Price-to-Earnings Ratio is a Better Predictor Overall”, IRMM, vol. 2, no. 1, pp. 59–74, Mar. 2012, [Online]. Available: https://izlik.org/JA74WS69JC
ISNAD
Rostan, Pierre - Rostan, Alexandra. “Assessing the Predictive Power of Customer Satisfaction for Financial and Market Performances: Price-to-Earnings Ratio Is a Better Predictor Overall”. International Review of Management and Marketing 2/1 (March 1, 2012): 59-74. https://izlik.org/JA74WS69JC.
JAMA
1.Rostan P, Rostan A. Assessing the Predictive Power of Customer Satisfaction for Financial and Market Performances: Price-to-Earnings Ratio is a Better Predictor Overall. IRMM. 2012;2:59–74.
MLA
Rostan, Pierre, and Alexandra Rostan. “Assessing the Predictive Power of Customer Satisfaction for Financial and Market Performances: Price-to-Earnings Ratio Is a Better Predictor Overall”. International Review of Management and Marketing, vol. 2, no. 1, Mar. 2012, pp. 59-74, https://izlik.org/JA74WS69JC.
Vancouver
1.Pierre Rostan, Alexandra Rostan. Assessing the Predictive Power of Customer Satisfaction for Financial and Market Performances: Price-to-Earnings Ratio is a Better Predictor Overall. IRMM [Internet]. 2012 Mar. 1;2(1):59-74. Available from: https://izlik.org/JA74WS69JC