The Role o f Financial Analysis i n Assessing t he Prices o f Shares o f Jordanian Industrial Joint Stock Companies Listed on the Amman Stock Exchange

Abstract

This study aimed to highlight the role of financial ratios in evaluating the prices of shares of Jordanian industrial joint stock companies listed on the Amman Stock Exchange; it also aimed to show which of these ratios has a more influential impact on these prices. The researcher conducted a test study survey to analyze the published data of (73) Jordanian industrial joint stock companies. The study sample (n= 18) for med about (25%) of the total population of the companies listed on the Amman Stock Exchange during the period 2010 2017. The researcher used the multiple regression method to identify the correlations between the financial ratios and the market share price s of the Jordanian industrial joint stock companies. The results of the study showed a statistically significant effect for the Ratio of Circulation (CR), the Quick Ratio (QR), the Profit Per Share (EPS), the Return on Equity (ROE), the Debt Ratio (DR), th e Total Assets Turnover (TAT), the Price to Earnings Ratio (PER), and the Price to Book Value Ratio (PBVR) on the market share price of the Jordanian industrial joint stock companies. However, the study showed no statistically significant effect of the Degree of Financial Leverage (DOL) and the rate of Working Capital Turnover (WCT) on the prices of these companies. In light of the study findings, the researcher recommended that all investors in the Amman Stock Exchange must have the know how of the fin ancial analysis, and to benefit from the expertise and knowledge of specialists in the financial analysis in order to rationalize their investment decisions and eventually take the best, decisive investment decisions. Companies should also consider the imp ortance of financial leverage ratios and working capital turnover that may be reflected on the value/prices of their shares.