RELATIONSHIP BETWEEN STOCK PRICES AND FINANCIAL RATIOS OF THE LISTED COMPANIES

The relationship between stock prices and financial ratios of the listed companies has been analyzed in differnet contexts - the studies are carried out on companies in different sectors with different financial ratios at different periods. Therefore, as market conditions change so rapidly, there is a need to resume research on this topic. There were selected ratios from the each financial ratios group that may have a relationship with the stock prices. The analysis was implemented by using the data of Lithuanian milk processing companies listed on the Baltic stock exchange over the period from 2010 to 2017. Correlation analysis was performed to determine which financial ratios influence the stock prices. The statistical significance of the relationship between the stock prices and the fixed asset turnover and absolute short-term solvency (the increase of the fixed assets turnover and absolute short-term solvency ratios decrease the stock prices). Spirmen correlation coefficient was calculated for each company individually. The results of the correlation analysis were based on a statistically significant linear multivariate regression model, which describes how the stock prices depend on the fixed asset turnover and short-term solvency ratios: the higher turnover of the fixed assets and short-term solvency ratios – the lower stock prices.