The Effects of Financial Index on Equity Returns in the Automotive Industry

Abstract: The main purpose of for-profit companies is to maximize the shareholder wealth, or toprofitable the companies. So, the company’s profit has a great importance for executives andinvestors.In addition to the importance of the profitable run in privatization of state enterprises inthe past few years, the public property companies and activation of Tehran Stock Exchange, it alsoprovides the necessary of this study which it can be provides information to make decisions,directors, shareholders, investors, creditors, creditors, etc. In this paper, in addition to theaforementioned presentation, financial indicators correlated with equity returns will investigate.Anne ratio, inventory turnover ratio, accounts receivable turnover ratio is considered as anindicator of financial. The purpose of this paper is to examine the impact on the return on equityratios in the automotive industry. For this purpose, all of the Stock Exchange which operating inautomotive industry has been chose and the ratios calculated for a period of six years, 2006-2011and correlations were calculated using SPSS software terms . The results show that there is acorrelation between the mentioned parameters and return on equity, this it can be used asguidance for users of financial statements for the optimal decisions.

Keywords:

Ratio , Anne Ratio , Inventory Turnover Periodic Ratio , Accounts Receivable Turnover