A Study on the impact of financial ratios to stock price behavior of selected publicly-listed international airline companies
There are a lot of determinants of stock prices. Real interest rates, inflation rates, money supply, foreign exchange rates, and other economic indicators were found to be contributing factors in the valuation of a company's share price. Previous researchers and analysts have long been curious...
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| Main Authors: | , , , |
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| Format: | text |
| Language: | English |
| Published: |
Animo Repository
2011
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| Subjects: | |
| Online Access: | https://animorepository.dlsu.edu.ph/etd_bachelors/10608 |
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| Institution: | De La Salle University |
| Language: | English |
| Summary: | There are a lot of determinants of stock prices. Real interest rates, inflation rates, money supply, foreign exchange rates, and other economic indicators were found to be contributing factors in the valuation of a company's share price. Previous researchers and analysts have long been curious about the concept of financial statement figures as having a significant relationship with any change in the stock price. Whether balance sheet accounts or income statement accounts, whether assets or liabilities, and whether income figures or expense accounts, statistical procedures were already undertaken by these researchers in order to formulate a string conclusion as to the relationship between financial statement figures and share prices.
This study, instead of plain figures, aims to make use of financial rations in order to determine whether or not reported figures of audited financial statements have a significant impact on the behavior of stock prices. Selected airline companies based from across the world were considered in the conduct of this study, with reference to SKYTRAX and IATA organizations. Eight financial ratios were employed, plus three industry-specific ratios which served as control variables, and one airline measure which was included as a dummy variable. Statistical results show that four of the eight financial ratios (net income margin, return on assets, return on equity, and debt ratio), one out of the three control variables (fleet size), and the dummy variable (airline rating)have a significant impact on stock price movement. |
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