THE INFLUENCE OF THE FINANCIAL INDICATORS OF CHINESE LISTED COMPANIES ON STOCK PRICE

Abstract

With the rapid development of China's securities market, stocks have become an important financial tool in the capital market. However, China's stock market generally shows the characteristics of high risk and serious instability. Stock price is not only affected by the macroeconomic situation, but also closely related to the financial indicators of listed companies. The purpose of this paper is to study the impact of financial indicators of listed companies on stock prices. Through no-probabilistic sampling and panel data which are obtained from Csmar database, this study selected secondary data of 8 Chinese listed companies from year 2010-2017. These 8 company as the representative of population from four different industries. The quantitative research method was used to study the influence of five financial indicators (current ratio, debt to equity ratio, earning per share, price to book value and return on assets) on stock prices. The result show that current ratio and debt to equity ratio have a positive influence towards stock price but not significant. Both earning per share and price to book value have a significant positive impact to stock price. While return on assets has negative and significant influence on stock price. This research can provide investors with investment decision-making reference.