The Effect of Company Fundamentals on Stock Values

Abstract

The influencing factors of stock values change with respect to the changes on economic factors depended on the selected time interval. These factors can be considered under two main categories (microeconomic and macroeconomic). The aim of this study is to identify the effect of selected microeconomic factors (Total Asset Turnover Ratio, Debt Ratio, Current Ratio, Price to Earnings Ratio, Net Profit Margin, and Book Value) on stock values between the second quarter of 2000 and the third quarter of 2012. This study is among the few researches which consider sector level performances of the stock values.The selected sectors for the analyses are electric, food, communication, paper, chemistry, metal-product, metal-main, stone, textile, commerce and transportation. The results indicate that Book value is highly significant positive impact on the stock prices of all the sectors. The effects of remaining factors are found to be different for each sector.

Keywords

• microeconomic factors
• sector level analyses
• stock values
• ISE