Abstract

This study aims to investigate the effect of financial factors on stock prices, and find out which factors are most statistically significant to the change of stock prices. Based on the information of 16 listed companies in Chinese home electrical appliance industry, three simple linear models are built and compared. The final model suggests that earnings per share, operating income per share, debt-to-asset ratio are statically significant to a company’s stock price. Besides, intrinsic diversity between companies contribute to difference in their stock prices.

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