Risk-return through financial ratios as determinants of stock price: A study from ASEAN region

• Published in: Journal of Security and Sustainability Issues
• Main Author: Jermsittiparsert K.; Ambarita D.E.; Mihardjo L.W.W.; Ghani E.K.
• Format: Article
• Language: English
• Published: General Jonas Zemaitis Military Academy of Lithuania 2019
• Online Access: https://www.scopus.com/inward/record.uri?eid=2-s2.0-85073001678&doi=10.9770%2fjssi.2019.9.1%2815%29&partnerID=40&md5=efb310878ef2c1a0abfb25e0bb0f8c7c

The objective of this empirical research is to analyze the risk-return through financial ratios as determinants of stock price in ASEAN region. To address this purpose, business firms from Malaysia, Indonesia, Thailand and Singapore are selected with a sample of 10 firms in each state over 2012 to 2016. Multiple regression technique is applied to analyze the relationship between financial ratios and stock prices. It is observed that current ratio, quick ratio, assets growth, return on assets, return on equity, return on capital employed, and price to earning ratio are significant determinants of stock price. Although this study is a reasonable addition in existing literature of financial ratios as determinants of stock price. However, contribution of the study can be viewed through covering a gap from the context of ASEAN region, which is under reserachers attentions for stock price determinants. Core limitations of the study covers limited number of sample size and five years of time duration. Besides, some ratios are missing which can be reconsidered in upcoming studies. These ratios include debt ratios, interest payment ratios, and fixed cost covered ratios as well. © 2019, General Jonas Zemaitis Military Academy of Lithuania.