Abstract
Stock markets are efficient if the prices at any time reflect all publicly available information. Share prices should be adjusted at those points when investors try to take advantage of the new information that was not subject to accounting recognition. The main goal of this paper will be to determine whether the financial statements of a selected group of companies listed on the Sarajevo and Banja Luka Stock Exchange represent a good basis and reflect the market price or simply follow the legal obligations and requirements by regulatory agencies. The paper is based on the regression analysis of dependent and independent variables in the period from 2011 to 2015. The dependent variable will be the closing trading price on the stock exchanges, whereas the independent variables will be: the market price and earnings (PE) ratio, earnings per share (EPS), net profit after tax (NP), return on equity (ROE), the market and book value (PB) ratio, and the total turnover on the stock exchanges (TR).
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