Journal of Contemporary Issues in Business and Government

Abstract

The purpose of this paper is to rank various performance measures in terms of information
content and determine the best financial performance metric among the set of performance
measures in explaining the variation in share price. For better exposition, a sample of 365
Indian listed companies, for a period of 5 years 2016-2020, have been divided into three
sectors-manufacturing, financial services and non-financial services. After performing
univariate regression analysis, the results of the study reveal that Earnings per share has a
superior association with share price across all companies. Dividend payout ratio, long term
debt to equity ratio, current ratio, fixed asset turnover ratio, debtor turnover ratio, interest
coverage ratio and EBIT margin have a non-significant relationship with share price
throughout the study period.