Impact of Profitability on Share Prices of Fertilizer Stocks of PSX
Muhammad Mustafa Sadiqa, Muhammad Muzammilb
- aKarachi University Business School (K.U.B.S), University of Karachi
- bAssistant Professor, Karachi University Business School (KUBS), University of Karachi
Papers open inside SciRah from the original publisher or repository; SciRah never hosts them.
Abstract
The main aim of this study is to dissect the impact of profitability on share prices, exclusively keeping a focus on the decision-making procedure and criteria used by fund providers of the company based on indicators of the financial performance. This study view variables such as firm size, growth, stave profitability, capital structure, debt, liquidity, and lagged debt, which affect a company’s overall financial performance and profitability. In turn, profitability materially influences share prices, with increasing share prices indicating stronger financial performance and corporate growth. Grabbing data of the fertilizer sector companies from their respective annual reports who are listed on the Pakistan Stock Exchange (PSX) over the period 2015 to 2024, namely Fauji Bin Qasim Limited, Engro Fertilizers Limited, Fatima Fertilizers Limited, and Fauji Fertilizers Limited, Regression analysis is run to examine the link among financial performance indicators (ROA, ROE, and EPS) and share prices. The findings show a statistically material direct relationship between profitability and share prices for all four firms.