A study on the influence of historical financial ratios towards the adjustment of filing price to final initial public offering offer price among selected publicly listed companies in the Philippines

• Main Authors: Ang, Jennifer G., Cheng, Liezl Abigail S., Juan, Eleanna Mae R., Yu, Winnona Claire A.
• Format: text
• Language: English
• Published: Animo Repository 2014
• Subjects: Accounting
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/11454
• Institution: De La Salle University

The current research aims to determine whether the historical financial ratios significantly affect the adjustment in IPO offer price. A sample of 40 selected publicly listed companies in the Philippines was obtained through convenience sampling. The statistical analysis used was the hierarchical multiple regression. The results showed that there was a significant relationship in terms of the return on equity (ROE), returns on asset (ROA) and total debt to equity ratios to the adjustment in offer price. However, earnings per share and total debt to asset ratio did not significantly affect the adjustment in offer price. Another aim of this study is to determine whether the trend in market condition alters the relationship between historical financial ratios and adjustment in IPO offer price. The results showed that only the earnings per share with the interaction of market condition significantly affected the adjustment to IPO offer price. On the other hand, the overall model indicated that there is a significant relationship between the historical financial ratios to the adjustment in IPO offer price, and also given the trend in the market condition, it showed that it significantly altered the association of historical financial ratios to the adjustment of IPO offer price. Understanding the determinants of adjustment in IPO price and the role of the trends in market condition is helpful for both management and investors alike. It may help the companies' management to find the right timing for initial public offering as well as the factors that help predict the adjustment in offer price in order to maximize the amount of capital that they can raise. Investors, on the other hand, would gain a better understanding to make informed decisions on the shares they are planning to invest in.