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The Relationship Between Financial Ratios and the Stock Prices of Selected European Food Companies Listed on Stock Exchanges

Author

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  • Marie Ligocká

    (Department of Finance and Accounting, Silesian University, School of Business Administration in Karviná, Univerzitní nám. 1934/3, 733 40 Karviná, Czech Republic)

  • Daniel Stavárek

    (Department of Finance and Accounting, Silesian University, School of Business Administration in Karviná, Univerzitní nám. 1934/3, 733 40 Karviná, Czech Republic)

Abstract
Stock prices can be influenced by many factors. It is possible to determine two categories of variables that can affect stock prices: macroeconomic and microeconomic variables. The paper is focused on microeconomic factors, specially financial ratios that reflect business activities of the companies. According to the study of Drummen and Zimmermann (1992) the individual characteristics of companies affect up to 50 % of stock prices. The object of this paper is to examine the relationship between selected financial ratios and the stock prices of food companies listed on selected European Stock Exchanges. Time series on annual frequency are used to examine the relationship between stock prices of selected companies and financial ratios with using the Generalized Method of Moments (GMM). Based on previous research we expect to find some linkages especially between stock prices and the profitability ratios.

Suggested Citation

  • Marie Ligocká & Daniel Stavárek, 2019. "The Relationship Between Financial Ratios and the Stock Prices of Selected European Food Companies Listed on Stock Exchanges," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 67(1), pages 299-307.
    • Handle: RePEc:mup:actaun:actaun_2019067010299
    DOI: 10.11118/actaun201967010299
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    References listed on IDEAS

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    1. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-1054, July.
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    Cited by:

    1. Sufian Radwan Al-Manaseer, 2020. "Impact of Market Ratios on the Stock Prices: Evidence from Jordan," International Business Research, Canadian Center of Science and Education, vol. 13(4), pages 1-92, April.

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