The Role of Market Capitalization in the Relationship Between ROA, ROE and Stock Prices in Tehran Stock Exchange
Financial ratios analysis is considered among the most widely used tools for evaluating the performance of companies and investments. In this regard, ROA and ROE ratios are among the most important criterias. This study seeks evidence about the role of market capitalization in the relationship betwe...
| Main Authors: | , , |
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| Format: | Article |
| Language: | fas |
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University of Isfahan
2019-12-01
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| Series: | Journal of Asset Management and Financing |
| Subjects: | |
| Online Access: | https://amf.ui.ac.ir/article_23764_6d53a6431b1cbd87ab8e946b93710cb2.pdf |
| _version_ | 1819071243087773696 |
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| author | AliAkbar Chaharmahali Javad Zahedi Reza Mohammadi |
| author_facet | AliAkbar Chaharmahali Javad Zahedi Reza Mohammadi |
| author_sort | AliAkbar Chaharmahali |
| collection | DOAJ |
| description | Financial ratios analysis is considered among the most widely used tools for evaluating the performance of companies and investments. In this regard, ROA and ROE ratios are among the most important criterias. This study seeks evidence about the role of market capitalization in the relationship between return on assets and return on equity with Stock prices and is compared with their book value. This study was conducted on 136 companies listed on the Tehran Stock Exchange between 2008-2016. In order to test hypotheses, we used of 8 multivariate regression. The results indicate that both of ratios with book value and market value have a significant and positive relationship with stock prices; But the strength of this relationship is not the same, market value has more strongest relation than book value, return on assets can explain the stock price changes alone and about 66% and Combined return on assets to book value and return on equity to market value have strongest correlation with the stock price changes. |
| first_indexed | 2024-12-21T17:18:44Z |
| format | Article |
| id | doaj.art-f0907467279b4ff9b101299bd03497bb |
| institution | Directory Open Access Journal |
| issn | 2383-1189 2383-1189 |
| language | fas |
| last_indexed | 2024-12-21T17:18:44Z |
| publishDate | 2019-12-01 |
| publisher | University of Isfahan |
| record_format | Article |
| series | Journal of Asset Management and Financing |
| spelling | doaj.art-f0907467279b4ff9b101299bd03497bb2022-12-21T18:56:13ZfasUniversity of IsfahanJournal of Asset Management and Financing2383-11892383-11892019-12-0174173010.22108/amf.2019.103686.109423764The Role of Market Capitalization in the Relationship Between ROA, ROE and Stock Prices in Tehran Stock ExchangeAliAkbar Chaharmahali0Javad Zahedi1Reza Mohammadi2Accounting Department – Faculty of Management and Accounting – Islamic Azad University (North Tehran Branch)- Tehran -IRANDepartment of Accounting, Faculty of Management & Accounting, Islamic Azad University Mashhad Branch, IranDepartment of Management, Faculty of Accounting and Management, Islamic Azad University Mashhad Branch, Mashhad, IranFinancial ratios analysis is considered among the most widely used tools for evaluating the performance of companies and investments. In this regard, ROA and ROE ratios are among the most important criterias. This study seeks evidence about the role of market capitalization in the relationship between return on assets and return on equity with Stock prices and is compared with their book value. This study was conducted on 136 companies listed on the Tehran Stock Exchange between 2008-2016. In order to test hypotheses, we used of 8 multivariate regression. The results indicate that both of ratios with book value and market value have a significant and positive relationship with stock prices; But the strength of this relationship is not the same, market value has more strongest relation than book value, return on assets can explain the stock price changes alone and about 66% and Combined return on assets to book value and return on equity to market value have strongest correlation with the stock price changes.https://amf.ui.ac.ir/article_23764_6d53a6431b1cbd87ab8e946b93710cb2.pdfreturn on assetsreturn on equitymarket valuebook valuestock prices |
| spellingShingle | AliAkbar Chaharmahali Javad Zahedi Reza Mohammadi The Role of Market Capitalization in the Relationship Between ROA, ROE and Stock Prices in Tehran Stock Exchange Journal of Asset Management and Financing return on assets return on equity market value book value stock prices |
| title | The Role of Market Capitalization in the Relationship Between ROA, ROE and Stock Prices in Tehran Stock Exchange |
| title_full | The Role of Market Capitalization in the Relationship Between ROA, ROE and Stock Prices in Tehran Stock Exchange |
| title_fullStr | The Role of Market Capitalization in the Relationship Between ROA, ROE and Stock Prices in Tehran Stock Exchange |
| title_full_unstemmed | The Role of Market Capitalization in the Relationship Between ROA, ROE and Stock Prices in Tehran Stock Exchange |
| title_short | The Role of Market Capitalization in the Relationship Between ROA, ROE and Stock Prices in Tehran Stock Exchange |
| title_sort | role of market capitalization in the relationship between roa roe and stock prices in tehran stock exchange |
| topic | return on assets return on equity market value book value stock prices |
| url | https://amf.ui.ac.ir/article_23764_6d53a6431b1cbd87ab8e946b93710cb2.pdf |
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