Importance of financial ratios for predicting stock price trends: evidence from the Visegrad Group
by Tomáš Pražák; Daniel Stavárek
International Journal of Trade and Global Markets (IJTGM), Vol. 11, No. 4, 2018

Abstract: This study examines the effect of primary microeconomic factors on the stock prices of select financial and energy industry companies listed and traded on the Central European Exchanges (Budapest Stock Exchange, Prague Stock Exchange, Bratislava Stock Exchange, or Warsaw Stock Exchange). Microeconomic factors are based on the financial situations at various companies. Financial ratios, gained from the financial statements of the individual companies, are used for the analysis. In general, the paper confirmed that profitability and debt ratios are the most important business factors from the perspective of the impact on stock prices. The existence of the relationship between stock prices and financial ratios is tested with the generalised method of moments (GMM) during the period of 2006 to 2016.

Online publication date: Mon, 07-Jan-2019

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