The Relationship Between Financial Ratios and the Stock Prices of Selected European Food Companies Listed on Stock Exchanges

Marie Ligocká and Daniel Stavarek
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Marie Ligocká: Department of Finance and Accounting, Silesian University, School of Business Administration in Karviná, Univerzitní nám. 1934/3, 733 40 Karviná, Czech Republic

Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 2019, vol. 67, issue 1, 299-307

Abstract: Stock prices can be influenced by many factors. It is possible to determine two categories of variables that can affect stock prices: macroeconomic and microeconomic variables. The paper is focused on microeconomic factors, specially financial ratios that reflect business activities of the companies. According to the study of Drummen and Zimmermann (1992) the individual characteristics of companies affect up to 50 % of stock prices. The object of this paper is to examine the relationship between selected financial ratios and the stock prices of food companies listed on selected European Stock Exchanges. Time series on annual frequency are used to examine the relationship between stock prices of selected companies and financial ratios with using the Generalized Method of Moments (GMM). Based on previous research we expect to find some linkages especially between stock prices and the profitability ratios.

Keywords: financial ratios; food industry; companies; Europe; stock price; GMM (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:mup:actaun:actaun_2019067010299

DOI: 10.11118/actaun201967010299

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