The Effects of Financial Index on Equity Returns in the Automotive Industry

Elham Talebbeydokhti, Amir Talebbeydokhti, Abbas Talebbeydokhti

Abstract


The main purpose of for-profit companies is to maximize the shareholder wealth, or to profitable the companies. So, the company’s profit has a great importance for executives and investors.In addition to the importance of the profitable run in privatization of state enterprises in the past few years, the public property companies and activation of Tehran Stock Exchange, it also provides the necessary of this study which it can be provides information to make decisions, directors, shareholders, investors, creditors, creditors, etc. In this paper, in addition to the aforementioned presentation, financial indicators correlated with equity returns will investigate. Anne ratio, inventory turnover ratio, accounts receivable turnover ratio is considered as an indicator of financial. The purpose of this paper is to examine the impact on the return on equity ratios in the automotive industry. For this purpose, all of the Stock Exchange which operating in automotive industry has been chose and the ratios calculated for a period of six years, 2006-2011 and correlations were calculated using SPSS software terms . The results show that there is a correlation between the mentioned parameters and return on equity, this it can be used as guidance for users of financial statements for the optimal decisions.

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