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The purpose of the paper was to investigate empirically whether ROA, ROE, and ROI together explain variations in the market prices per share of publicly traded banking financial institutions in Ghana for the period 2009 – 2013. We found a significant linear relationship between the ROA, ROE, and ROI together the market prices per share, with the RO...
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... Firm value, often measured by metrics such as market capitalization and share price, is influenced by a range of internal and external factors. Among these, financial performance is particularly important as it reflects a company's ability to generate profits and manage costs [8], [9], [10]. In the manufacturing sector, financial performance is frequently evaluated through profitability ratios, including return on assets (ROA), return on equity (ROE), and profit margins [11], [12], [13]. ...
This study investigates the effect of financial performance, risk, and liquidity on firm value in the manufacturing sector in Indonesia. Using a sample of 60 manufacturing companies listed on the Indonesia Stock Exchange, the research employs a quantitative approach with data analyzed through SPSS version 26. Financial performance was measured by Return on Assets (ROA), risk by Debt-to-Equity Ratio, and liquidity by Current Ratio. The Price-to-Book Ratio represented firm value. The results reveal that financial performance and liquidity have a significant positive effect on firm value, while risk has a negative effect. These findings suggest that manufacturing companies in Indonesia can enhance their market value by improving profitability and liquidity while effectively managing financial risk.
... An organization's primary goal is to maximize profit, and if it is unable to do so, it will cease to exist as a going concern and cease to operate. The operating efficiency of the business is assessed using the profitability ratios (Kabajeh et al., 2012;Agha, 2014;Osman and Iddrisu, 2015); (Lawal A. I. et al., 2017b). ROA, ROE, and ROI are the three principal profitability measures employed in relevant studies to assess a firm's profitability (Kabajeh et al., 2012;Osman and Iddrisu, 2015); (Babajide et al., 2016a). ...
... The operating efficiency of the business is assessed using the profitability ratios (Kabajeh et al., 2012;Agha, 2014;Osman and Iddrisu, 2015); (Lawal A. I. et al., 2017b). ROA, ROE, and ROI are the three principal profitability measures employed in relevant studies to assess a firm's profitability (Kabajeh et al., 2012;Osman and Iddrisu, 2015); (Babajide et al., 2016a). This study adopted ROA and ROE. ...
... The paid-up share capital, share premium, reserves, and surplus less accumulated losses make up the shareholders' equity, or net value. It is also possible to determine net worth by deducting total obligations from total assets (Choudhry, 2012;Osman and Iddrisu, 2015); (Babajide et al., 2016b). The ROE used in this study is determined as follows: ROE = Profit after Interest and Tax and Preference Dividends Net Worth (equity) Current ratio, which is the primary liquidly ratio for this study, is chosen as the liquidity ratio. ...
This study aims to investigate how the adoption of the International Financial Reporting Standard
(hereinafter referred to as IFRS) affected the market price of shares of a select group of profitable
companies in In the Arab Republic of Egypt between 2017 and 2022. This study was conducted when the
country's financial statements were made in accordance with its accounting standard. Since the Arab
Republic of Egypt implemented IFRS in 2017, there has been a knowledge gap about the relationship
between Financial Ratio Analysis and Market Price of Share. This study aimed to fill that gap. It only
used data from the financial statements of the chosen firms and utilized multiple regression analysis.
Earnings per share, net assets per share, liquidity ratio, debt ratio, return on asset, and return on equity
were all employed as financial ratio proxies. The outcome demonstrates a good and significant
relationship between profitable companies and affiliated companies in the Arab Republic of Egypt firms
Market Price of Share for Earnings per Share, Net Assets per Share, Debt Ratio, and Return on Asset
Ratio. Additionally, it was discovered that the in the Arab Republic of Egypt profitable enterprises,
affiliated companies, and Agro-Allied Quoted firms' Market Price of Share are not significantly
correlated with the liquidity ratio and return on equity ratio
... An organization's primary goal is to maximize profit, and if it is unable to do so, it will cease to exist as a going concern and cease to operate. The operating efficiency of the business is assessed using the profitability ratios (Kabajeh et al., 2012;Agha, 2014;Osman and Iddrisu, 2015); (Lawal A. I. et al., 2017b). ROA, ROE, and ROI are the three principal profitability measures employed in relevant studies to assess a firm's profitability (Kabajeh et al., 2012;Osman and Iddrisu, 2015); (Babajide et al., 2016a). ...
... The operating efficiency of the business is assessed using the profitability ratios (Kabajeh et al., 2012;Agha, 2014;Osman and Iddrisu, 2015); (Lawal A. I. et al., 2017b). ROA, ROE, and ROI are the three principal profitability measures employed in relevant studies to assess a firm's profitability (Kabajeh et al., 2012;Osman and Iddrisu, 2015); (Babajide et al., 2016a). This study adopted ROA and ROE. ...
... The paid-up share capital, share premium, reserves, and surplus less accumulated losses make up the shareholders' equity, or net value. It is also possible to determine net worth by deducting total obligations from total assets (Choudhry, 2012;Osman and Iddrisu, 2015); (Babajide et al., 2016b). The ROE used in this study is determined as follows: ROE = Profit after Interest and Tax and Preference Dividends Net Worth (equity) Current ratio, which is the primary liquidly ratio for this study, is chosen as the liquidity ratio. ...
This study aims to investigate how the adoption of the International Financial Reporting Standard (hereinafter referred to as IFRS) affected the market price of shares of a select group of profitable companies in In the Arab Republic of Egypt between 2017 and 2022. This study was conducted when the country's financial statements were made in accordance with its accounting standard. Since the Arab Republic of Egypt implemented IFRS in 2017, there has been a knowledge gap about the relationship between Financial Ratio Analysis and Market Price of Share. This study aimed to fill that gap. It only used data from the financial statements of the chosen firms and utilized multiple regression analysis. Earnings per share, net assets per share, liquidity ratio, debt ratio, return on asset, and return on equity were all employed as financial ratio proxies. The outcome demonstrates a good and significant relationship between profitable companies and affiliated companies in the Arab Republic of Egypt firms Market Price of Share for Earnings per Share, Net Assets per Share, Debt Ratio, and Return on Asset Ratio. Additionally, it was discovered that the in the Arab Republic of Egypt profitable enterprises, affiliated companies, and Agro-Allied Quoted firms' Market Price of Share are not significantly correlated with the liquidity ratio and return on equity ratio. Keywords: Returns on asset; Returns of equity; Agriculture and agro-allied; Market price; Earnings per share; Net assets per share; Debt ratio; Liquidity ratio
... st rates do not have a solely negative impact on the stock market. When interest rates are low, it is less expensive for companies to borrow money, and this can lead to an increase in stock prices. Additionally, when interest rates are low, it is more attractive for people to invest in stocks, and this can also lead to an increase in stock prices. Issah,O.,& Ngmenipuo, I. M. (2015). Overall, interest rates have a moderating effect on the relationship between investment and financial performance on stock price movements. ...
This is qualitative and quantitative research on the topic of the Effect of Investment and financial performance on the stock price under the moderate role of Interest rate. Previous studies have examined many factors that influenced the stock price. This paper will survey the flourished literature on the effect of investment and financial performance on the stock price of the listed companies. It makes a detailed and comprehensive review of the relevant literature. This research uses secondary data majorly from the financial reports of the companies listed on the Pakistan Stock Exchange.
... To identify the relationship between profitability ratios and market share prices (Issah & Ngmenipuo, 2015) analyzed pooled OLS regression on the publicly traded banking financial institutions in Ghana. Data was collected from the annual report of bank financial institutions in Ghana from 2009 to 2013 to examine the relationship between firm profitability ratio, performance, and market share prices. ...
The study aims to assess Islamic banking performance in Bangladesh using fundamental profitability ratios. The secondary data is collected from the financial statements of six respective Islamic Banks in Bangladesh from 2010 to 2019. The study applied the ratio analysis to measure the performance of selected banks. Finally, we used trend analysis to identify the selected ratios and factors' present and future movement. The ratio analysis concluded that Al-Arafah Islami Bank Limited (AIBL), Export Import Bank of Bangladesh Limited (EXIM), Social Islamic Bank Limited (SIBL), and Shahjalal Islami Bank Limited (SJBL) are slightly in a good position in terms of profitability ratio and management efficiency ratio. In terms of credit risk performance, all banks are in a declining position. SIBL and IBBL are doing well in management ability. However, the study found that AIBL seems to be the most competent in terms of overall performance. Finally, the study is concluded that Islamic banks have a significant contribution to the banking industry of Bangladesh. This study provides clear guidelines about the basic performance indicators, risk, and management efficiency. The investors, stakeholders and the responsible parties should be more concerned while measuring the performance of overall Islamic banking in Bangladesh.
... Most investors in the present business world select many investment instruments such as stocks, treasury bonds, treasury bills, debentures, and repos for their investment requirements (Issah & Ngmenipuo, 2015). Among those investment instruments, invest in company shares is a desirable method for investors. ...
... To select the most suitable company, share to invest in, the investors analyze the current and forecasted share prices of interested companies. Consequently, the share price is one major factor that affects to decisions of investors of an entity (Issah & Ngmenipuo, 2015). The numerous factors such as political situation, government policies, financial performance, future expectations of investors, interest rate, inflation, firm size, and business nature affect variations of the share price of an entity . ...
Most investors in the present business world select many investment instruments such as stocks, treasury bonds, treasury bills, debentures, and repos for their investment requirements (Issah & Ngmenipuo, 2015). Among those investment instruments, invest in company shares is a desirable method for investors. To select the most suitable company, share to invest in, the investors analyze the current and forecasted share prices of interested companies. Consequently, the share price is one major factor that affects to decisions of investors of an entity (Issah & Ngmenipuo, 2015). The numerous factors such as political situation, government policies, financial performance, future expectations of investors, interest rate, inflation, firm size, and business nature affect variations of the share price of an entity (Menaje, 2012). Therefore, it is essential to be aware of the reasons behind the variations of the share price. Financial performance is one of the significant factors that affect the determination of the share price (Menaje, 2012).
Some experts in the finance field found that there is a significant relationship between financial performance and share price (Martani & Khairurizka, 2009) but some studies concluded that there is no relationship between financial performance and share price (Naceur, 2003) and there were some recent results that seemed to contradict. According to Sitorus & Elinarty (2017), Earnings Per Share (EPS) represents the amount of money generated from each share of the particular entity. Sitorus & Elinarty (2017) mentions that low EPS ratio may indicate that the company's management has not succeeded in satisfying the shareholders, because high EPS ratio equals a high return for the shareholders. Return On Asset (ROA) is an indicator of how profitable a company is relative to its total assets. ROA ranks as one of the most extensively used variables in determining Firm profitability (Menaje, 2012). A high ROA means the business is able to utilize its resources well in generating income. A higher-income means better returns to investors which impacts the stock price. NgYuce & Chen (2020) showed that the higher ROA influenced the company’s performance significantly correlated with share price (SP).
In recent years many financial companies in Sri Lanka have been encountered many issues regarding share prices due to the decreasing of the financial performances. As a result, many studies have been carried out to find the impact of financial performance on share price. Still, only a few studies were carried out to investigate the impact of financial performance on the share prices of listed financial companies in Sri Lanka. The researcher has identified the need for considerable attention on the impact of financial performances on the share prices with the econometrics model. Therefore, this study investigates the impact of financial performances on the share prices of the listed financial companies on the Colombo Stock Exchange (CSE).
... Product innovation is vital as it is at the core of new product strategy. The introduction of new product is not only important in securing future profit growth but also in the corporate share price performance (Issah and Ngmenipuo 2015). To be successful in implementing a new product strategy, a business needs to be competent and be able to invest substantial amount of resources in its research and development function, product design, marketing research and related departments. ...
This paper examines the effect of licensing of foreign technology on new product innovation and market access. Data were collected from the archives of the World Bank’s Global Enterprises Survey for fifty countries. The data were analysed using the Structural Equation Model (SEM) with the aid of STATA software. The SEM result show that licensing of external technology is positively and significantly related to new product innovation and access to market. However, the moderating independent variable (website usage) did not show a significant relationship with new product
innovation and market access. The paper offers practical implication for new product innovation, which is that local enterprises can save the internal cost and time of research and development for new products by adopting the option of licensing foreign technology. This also has the advantage of assisting local enterprises to offer a new product to the market. Further research is recommended to add more countries to increase the number of observations.
... The performance measurement considered an essential need for the bank's growth and to determine the best solutions for the problems arisen by bank (Qasim, Yazis, & Ibrahim, 2017). Profitability ratios can be used to estimate the volume of a bank to generate earnings rather than evaluation of all costs and expenses of the bank (Issah & Ngmenipuo, 2015). Abu Hanifa (2015) strengthens that ratios are helpful for banks' performance measurement and it can compensate with bank disparities created by bank size. ...
In Malaysia, the remarkable performance and stability of Islamic subsidiaries of conventional banks have forefront leading in Islamic banking business. This research attempts evaluating the financial performance and stability elements in two full-fledged and two Islamic subsidiaries of conventional banks for eight years (2010-2017). In this research, the profitability is the return on assets (ROA) and stability measures are z-score. The elements of CAMEL framework is denoted as internal determinants by selecting the appropriate ratios of capital adequacy, asset quality, management competency, earning quality and liquidity through hand-collected information provided by the bank websites. Moreover, correlations and regression tests (FEM and GMM) are used to examine the relationships and significance of CAMEL as independent variables with financial performance and stability of Islamic banking. According to determinants of profitability, the assets quality, management efficiency, earning quality and liquidity of Islamic banks supported the return significantly. Instability, the financial stability indicators found to be powerfully critical to assets quality, management efficiency and liquidity. The findings of this research may have thoughtful practical implications on the financial performance and stability analysis of Islamic banking industry. This research provides the practitioner, regulator and researchers consciousness to expand knowledge on CAMEL framework for standardization on performance and stability comparison of banking industry.
... Return on Asset (ROA): ROA is measured as ratio of net profit after tax to total assets and provides information on management's ability to generate income from using the assets of the business. ROA is a key performance indicator for banks and it is used to monitors changes in the efficient use of assets over time (Osman & Iddrisu, 2015). This study therefore used ROA as a measure of Financial Performance. ...
Increase in losses borne by banks as a result of inadequate operational risk management practices and the adverse impact on banks' financial performance has been a major concern to bank management and regulators. Hence, the purpose of this study is to analyse the impact of operational risk management practices on the financial performance of commercial banks in Nigeria. 10-years (2008-2017) secondary data extracted from audited financial statements of selected commercial banks in Nigeria was used for the study. The data was analysed using the Linear Multiple Regression Model. The results showed that there is a positive relationship between operational risk management and the financial performance of banks. The findings revealed that sound operational risk management practices impact positively on the financial performance of banks. We, therefore, recommend that banks' management should deploy adequate resources towards understanding operational risk to ensure sound operational risk management and improved financial performance of banks. The study is based on a limited scope; therefore, a larger sample size may make for an interesting research in the future.
... Talamati & Pangemanan, (2014) Exchange" the results of partially, ROA has positive significant effect on market share price, ROE has negative effect on market share price and EPS not have significant effect on market share price. Issah & Ngmenipuo, (2015) the title "An Empirical Study Of The Relationship Between Profitability Rations and Market Share Prices of Publicly Traded Banking Financial Institutions in Ghana" these findings a significant linear relationship between the ROA, ROE and ROI together the market prices per share, with the ROE contributing more than the ROA. Kabajeh, et al., (2012) the title "The Relationship between the ROA, ROE and ROI Ratios with Jordanian Insurance Public Companies Market Share Prices" the results also showed a positive but low relationship between each of ROA ratio separately and ROI ratio separately with Jordanian insurance public companies share prices.Anwaar, (2016) "Impact of Firms' Performance on Stock Returns (Evidence from Listed Companies of FTSE-100 Index London, UK)" results shows that net profit margin, return on assets has got significant positive impact on stock returns while earnings per share has got significant negative impact on stock returns. ...
... This is because good ROA reflects the use and management of a company's assets optimal so that it will increase profitability and the company's stock price.. The results of this study are also in accordance with the results of (Issah & Ngmenipuo, 2015) which states that there is a positive linear relationship between ROA, ROE, ROI and the market price of shares of banking financial institutions quoted on the Ghana Stock Exchange (GSE). So is the same with research of (Anwaar, 2016) that there is ROA significant effect on stock return. ...
This study aims to analyze systematic risk, earnings per share, price to earnings ratio, return on equity, and return on assets on stock prices in pharmaceutical companies listed on the Indonesia Stock Exchange. The method used in this research is quantitative method. Data collection techniques are carried out through secondary data that is data obtained indirectly by studying documents related to research. This study uses SPSS 22. Data analysis techniques with multiple linear regression. After conducting research with the hypothesis test found that partially the Return on Equity and Return on Assets variables significantly influence the stock price while the systematic risk variable, Earning per Share and Price Earning Ratio do not significantly influence the stock price. Then simultaneously using the F test, found systematic risk variables, Earning per Share, Price Earning Ratio, Return on Equity and Return on Assets simultaneously or simultaneously have a significant effect on stock prices on Pharmaceutical companies listed on the Indonesia Stock Exchange. This is a factor that should be considered by investors and companies alike, to pay more attention to the factors that contribute to the share price for the long-term sustainability of the company.
