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Using the Financial Analysis Approach to Forecast Industrial Production: A Guide from Jordan

Author

Listed:
  • H. Banikhalid
  • S. Al-oshaibat

Abstract

This study aims to derive the function that can be used to predict the growth rate in the added value of industrial production in Jordan, depending on the financial ratios of industrial companies listed on the Amman Stock Exchange. To achieve the objectives of the study, the descriptive and analytical approach and multiple regression analysis were used using the SPSS program. The study population was represented by the public joint-stock companies listed on the Amman Stock Exchange in the industrial sector from 1994 to 2018. Results show that the financial ratios influencing the growth rate in industrial production value added the most (Industry t + 1) are earnings per share (EPS), net profit margin (NPM), and return on equity (ROE). Moreover, the effect is non-linear expressed by a function that can be used to predict the industrial production in Jordan. The study recommends paying attention to the partial input to predict macroeconomic variables, especially with the development of systems for storing and processing big data, as this method provides appropriate and sufficient data to make accurate decisions and enhances the right track.

Suggested Citation

  • H. Banikhalid & S. Al-oshaibat, 2023. "Using the Financial Analysis Approach to Forecast Industrial Production: A Guide from Jordan," International Journal of Business and Management, Canadian Center of Science and Education, vol. 16(5), pages 1-91, February.
    • Handle: RePEc:ibn:ijbmjn:v:16:y:2023:i:5:p:91
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    References listed on IDEAS

    as
    1. Xiaoquan Jiang & Bong Soo Lee, 2012. "Do Decomposed Financial Ratios Predict Stock Returns and Fundamentals Better?," The Financial Review, Eastern Finance Association, vol. 47(3), pages 531-564, August.
    2. Giuseppe Parigi & Roberto Golinelli & Giorgio Bodo, 2000. "Forecasting industrial production in the Euro area," Empirical Economics, Springer, vol. 25(4), pages 541-561.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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