Abstract
This study has been conducted to analyze and compare the impact of financial variables on share price of Indian automobile companies. Companies have been selected on the basis of market capitalization. Secondary data has been considered for this study. Secondary data has been collected from annual reports of companies for the financial years 2013-14 to 2017-18 and share prices from the website of Bombay Stock Exchange. Impact has been examined with the help of correlation and regression. Findings of this study shows that Maruti Suzuki India Ltd. share price has been affected by the financial variables. In case of other companies impact of financial variables on share price vary from companies to companies. It has also been found out that there is no significant impact of assets turnover ratio on share price of all selected automobile companies.
Highlights
The framework of corporate and financial sector is precarious, especially the disparity in the micro and macro financial variables and it's repercussions on capital market, firms stress more on stock market policies because investment decisions require a lot of caution
Meriç et al (2017) analyzed the relationships between stock price, Price Earnings (PE) ratio and Dividend Yield (DY) ratio of the banks listed at Borsa Istanbul (BIST) Banking sub-sector and concluded that variables changes in size and direction from bank to bank
Sample Size & Selection Criteria : Four Automobile companies have been taken for the purpose of this study namely, Maruti Suzuki India Ltd., Mahindra & Mahindra Ltd., Hero MotoCorp Ltd. and Tata Motors Ltd. and the selection have been done on the basis of market capitalization as on 1st April, 2018
Summary
The framework of corporate and financial sector is precarious, especially the disparity in the micro and macro financial variables and it's repercussions on capital market, firms stress more on stock market policies because investment decisions require a lot of caution. The overall economic speculation and counter cyclic sensitivity of the company’s sector is important, it becomes necessary to identify all possible factors on stock movements. Fundamental/ internal factors include dividend policy, Earnings Per Share (EPS), investment, assets, performance of the company, debt, creation of new assets, etc., whereas non fundamental/external factors include economy, Gross Domestic Product (GDP), inflation, money supply, government rules and regulations, investors' behavior, competition, market conditions, natural environment and other economic conditions. Financial Variables : The factors or variables used for forecasting the financial events of the upcoming time and affect the share prices of the company. Assets Turnover Ratio : The assets turnover ratio is an efficiency ratio that measures a company’s ability to generate sales from its assets. Book Value per share : It compares the shareholders’ equity (excluding preferred shares) amount to the total number of outstanding equity shares
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