Abstract:
Over time market players have developed much interest in factors that bring about
movement or change in share price in the stock market either upward movement or
downward movement several issues have been adduced for this over the years. This study
explores analysis of the influence of financial indicators on stock price movement covering
the period 2009-2014, sample drawn from the listed manufacturing industry. The sample
consists 15 manufacturing companies listed on Colombo stock exchange (CSE). In order to
examine the analysis of financial indicators on stock price movement, the current ratio (CR),
dept equity ratio (D/E Ratio), assets turnover ratio, price earnings ratio (P/E Ratio) and
Firm Size (FS) were used as independent variables, whereas market price per share (MPS) is
used as the dependent variable. Data of the selected firms which are listed in the Colombo
stock exchange (CSE) Sri Lanka were obtained from their websites. The statistical tests were
used includes: descriptive statistics, correlation and regression analyses. Through the
multiple correlation analysis with the help of user friendly statistical software it is found,
there is significant and positive association between MPS and CR (P= 0.008, < 0.01). Which
indicate that, as the CR increases it would tend to increase the MPS of the company, On the
other hand, there is significant and positive correlation between MPS and FS (P=0.001, <
0.01). Which indicate that, as the FS increases it would tend to increase the MPS of the
company.
