Impact of Firms' Performance on Stock Returns (Evidence from Listed Companies of FTSE-100 Index London, UK)

Maryyam Anwaar

Authors

Maryyam Anwaar

Keywords:

earnings per share (EPS), quick ratio (QR), return on assets (ROA), return on equity (ROE), net profit margin (NPM), stock returns (SR), and panel reg

Abstract

The research is conducted to test the impact of firm performance on stock returns, evidence from the firms listed on FTSE-100 Index, London Stock Exchange over the period 2005 to 2014. In this study the researcher used has five independent variables and one dependent variable. Earnings per share, quick ratio, return on assets, return on equity, and net profit margin is used as independent variables while stock returns is used as dependent variable. Panel regression analysis method is used for the data analysis. Results shows that net profit margin, return on assets has got significant positive impact on stock returns while earnings per share has got significant negative impact on stock returns. When earnings per share will increase, than all those investors who wants short term gain and conscious for dividend sell their stock in to the market due to which in near future the stock returns of the company will be decrease due to excess supply of stocks, while return on equity and quick ratio shows insignificant impact on stock returns.

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How to Cite

Impact of Firms’ Performance on Stock Returns (Evidence from Listed Companies of FTSE-100 Index London, UK). (2016). Global Journal of Management and Business Research, 16(8), 31-39. https://journalofbusiness.org/index.php/GJMBR/article/view/

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