EconPapers    
Economics at your fingertips  
 

The Effect of Financial Ratios on the Stock Price Development

Tomáš Pražák () and Daniel Stavarek ()
Additional contact information
Tomáš Pražák: Department of Finance and Accounting, School of Business Administration, Silesian University

No 43, Working Papers from Silesian University, School of Business Administration

Abstract: This study examines the effect of the main microeconomic factors on the stock prices of select energy industry companies listed and traded on the Prague Stock Exchange and Warsaw Stock Exchange. The microeconomic factors are based on the financial situation in companies. The financial ratios (debt/equity ratio, liquidity ratio, financial leverage ratio, return on equity ratio and return on investment ratio) are gained from the financial statements. The existence of relationship between stock prices and financial ratios is tested with the Generalized Method of Moments. During the period 2006 - 2015 we revealed a positive impact of financial leverage ratio on stock prices in both countries and a negative effect of liquidity ratio on stock prices in both countries.

Keywords: Financial ratios; stock prices; regression analysis; Czech Republic; Poland; energy industry (search for similar items in EconPapers)
JEL-codes: C58 D24 G21 M21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn
Date: 2017-08-31
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://www.iivopf.cz/images/Working_papers/WPIEBRS ... _Prazak_Stavarek.pdf First version, 2017 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:opa:wpaper:0043

Access Statistics for this paper

More papers in Working Papers from Silesian University, School of Business Administration Contact information at EDIRC.
Bibliographic data for series maintained by David Jančar ().

 
Page updated 2018-05-17
Handle: RePEc:opa:wpaper:0043