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@article{185455,
        author = {Karma Wangchuk},
        title = {The Impact of Financial Ratios on Stock Price Performance of Indian Companies: A Quantitative Analysis},
        journal = {International Journal of Innovative Research in Technology},
        year = {2025},
        volume = {12},
        number = {5},
        pages = {1496-1505},
        issn = {2349-6002},
        url = {https://ijirt.org/article?manuscript=185455},
        abstract = {This research is focused to examine the relationship of financial ratios with stock price movement by analyzing Return on Equity (ROE), Current Ratio and Debt-Equity Ratio (D/E) of Indian firms listed on National Stock Exchange (NSE). In this research quantitative research design is used and a sample of 100 firms for the period of FY 2022-2023 is taken. The lender's mind is used for the collection of data from annual accounts financials and online financial data source. The data is analyzed through statistical techniques of Pearson correlation and multiple linear regression. According to the results, Return on Equity (ROE) and stock returns have significant strong positive association, Current Ratio also has positive association with stock returns but comparatively weak; while Debt-Equity Ratio has negatively impacted stock return but statistically insignificant. The result has a significant contribution towards investment and analysis firms, investors and policymakers as it establishes the pre-eminence of profitability and liquidity in contrast to leverage concerning stock returns. The research enhances the understanding of the investment decisions and highlights the importance of progressive monitoring of financial ratios in emerging economies.
Along with the financial ratios, dividend policy can also provide the additional understanding of stock performance as it also plays a crucial role in defining the financial position and market value of the company (Kanakriyah, 2020). In this regard, the stock returns related to firm with steady dividend policy are less volatile. This aligns with the influence of liquidity and profitability on the market, which directs that investors can prescribe the use of dividend policy as part of their stock analysis in order to increase the prediction accuracy of their financial ratios. It is advisable that by combining the dividend policy with the ratios such as ROE and Current Ratio, the investor and analysts can have better and complex understanding about the financial position of the company and its ability to provide steady returns. Hence, the future studies may examine the interaction of financial ratios with the dividend policy for providing full-fledged guidance regarding the stock performance in India’s growing markets.},
        keywords = {},
        month = {October},
        }