The Effect of Analyzing Financial Ratios on the Market Price of Profitable Companies and Allied Companies in The Arab Republic of Egypt

الملخص

Abstract

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