Abstract

This study aimed to identify the impact of a number of financial and accounting variables on shares prices of industrial companies listed on the Palestine Securities Exchange. Those factors are: Return on equity ratio, earnings per share, current ratio, ratio of total liabilities to total assets, rate of assets turnover, and return on total assets. The study population included all of industrial companies listed on the Palestine Stock Exchange (10 companies). The study covered the time period between the years 2004-2008. The study found that there was a significant effect of each of earnings per share, current ratio, ratio of total liabilities to total assets, and return on total assets on the prices of stock prices of industrial companies. As for the return on equity ratio, and the rate of assets turnover, the results showed insignificant association with stock prices. On the other hand, a significant effect of independent variables on the stocks prices was found by using multiple regression analysis, except for variables of current ratio, and the ratio of total liabilities to total assets were excluded from the multiple regression model due to a significant correlation between them.

The study emphasized the importance of further studies with different economic sectors, and also emphasized the importance of increasing the degree of disclosure by companies on factors influencing shares prices.