THE IMPACTS OF FINANCIAL RATIOS ON STOCK PRICES IN MALAYSIA: EVIDENCE FROM BANKING INDUSTRY

• Main Authors: Bakri, Abdul Karim, Annescia Franciene, Patres, Bridney, Chow Yi Ying, Jefferson Tiong, Kung Lien
• Format: Article
• Language: English
• Published: UNIMAS Publisher 2023
• Subjects: HG Finance
• Online Access: http://ir.unimas.my/id/eprint/43860/1/Bakri%20et%20al-1-2.pdf; http://ir.unimas.my/id/eprint/43860/; https://publisher.unimas.my/ojs/index.php/URAF
• Institution: Universiti Malaysia Sarawak

The objective of this study is to identify whether the financial ratios have an impact towards the stock price in the banking industry of Malaysia. The financial ratios used in this study are the net profit margin, price to earnings ratio and dividend payout ratio. The sample collected for this empirical study covered 10-years period from 2013-2022. The study found that the net profit margin and price to earnings ratio boost stock price, however the dividend payout ratio decreases stock price. The influence of net profit margin and dividend payment ratio on stock price is negligible, in contrast to price to earnings ratio, which has a large effect on stock price. The findings have major implications to investors, industry and policy makers.