An evaluation of factors affect the returns of cultural companies

Abstract

This study analyzes what factors will affect the returns of cultural companies. Returns are measured by earnings per share (EPS). Seven financial ratios (current ratio, debt ratio, return on total assets, operational cash flow ratio, equity ratio, inventory turnover, dividend payout ratio) and non-financial variables (gender, age, degree and oversea background of senior directors in the companies) are further examined. Ten-year empirical data of Chinese listed cultural companies from the China Stock Market & Accounting Research (CSMAR) are used in the experiment. This paper uses variance inflation factors (VIFs) and F-test to select variables. Then, the Breusch-Pagan test and Shapiro-Wilk test are applied to diagnose the model. Finally, due to some anomalies, the Box-Cox transformation is used to fix the model. This paper contributes to exploring different kinds of factors that may affect the returns of cultural companies in the Chinese context.