Importance of Financial Analysis for Published Financial Information to Predict the Stocks Behavior (Case study-ASE –Industrial Sector-Jordan (original) (raw)
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International Journal of Economics and Finance, 2019
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This paper aims to study the effect of corporate financial performance on stock prices and consequently investors' decisions. The Jordanian banks enlisted in Amman Stock Exchange were studied over the period 2006-2017, as their average annual prices were linked in a multiple regression equation to the following independent variables (financial ratios), which are: Total Assets, Return on Equity, Return on Assets, Price-Earnings ratio, Price-to-Book ratio, Dividend per Share ratio and Debt ratio. Multiple regression analysis was used by SPSS to test the equation and showed that there are significant positive relationships between the average annual stock prices and the total assets, the Price-to-Book ratio and Dividend/Share ratio, while indicated a negative relationship with the Debt ratio. The rest of the independent variables were insignificant to the annual average stock prices.
Journal of Applied Economic Sciences, 2020
Price in relation to Earnings ratio (PE Ratio) and Book Value (PB Ratio) parameters have received considerable attention in predicting stock returns. However, there have been varying results of the predictive power of PE and PB Ratio to stock returns especially when different market conditions have been considered. This study was conducted to determine if PE and PB ratios can be used as predictors for stock market returns among financial institutions listed in Bahrain Stock Exchange. It utilized an analytical research design which made use of panel data analysis. Total samples of 19 financial institutions were included study with financial data covering the periods 2015 to 2018. The study found that both PE and PB ratio significantly predicts stock returns of financial institutions stocks in Bahrain at 0.05 level of significance. Both ratios have positive coefficients suggesting a positive association with stock returns. Finally, the study also concludes that loading PE and PB as predictor of stock returns would only generate estimate parameters that can only show cross and time fixed effects. Thus, individual time invariant variables or company and industry specific factors do not play a role in the ability of PE and PB ratios in predicting stock returns.