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Fundamental factors affecting the share price of Electronic Data Processing (EDP) services companies

Author

Listed:
  • Simon RAFAQAT

  • Sana RAFAQAT

  • Sahil RAFAQAT

  • Saoul RAFAQAT

  • Dawood RAFAQAT

Abstract

Purpose - This article aims to analyze the impact of fundamental factors on the share price of medium-sized IT services companies (EDPs) listed on the NASDAQ stock exchange during the period from 2016 to 2020. \n Design/methodology/approach - The authors use statistical tools such as Pearson correlations, multicollinearity test, autocorrelation test, ANOVA, multiple regression analysis, normality, heteroscedasticity. Additionally, using ratio analysis, financial ratios/fundamental factors including company size, return on equity, asset turnover rate, current ratio, net profit margin, debt ratio, return on assets, earnings per share and operating cash flow ratio, were selected for the study. \n Findings - The results of the multiple regression analysis indicate that asset turnover rate and firm size have a significant negative impact while earnings per share have a significant positive impact. In addition, the debt ratio has a non-significant positive impact while the current ratio, net profit margin, return on assets, return on equity and operating cash flow ratio have a non-significant negative impact. significantly on the share price of experienced companies. Furthermore, the R-squared value shows that the stock price is 59% influenced by the selected fundamental factors and the ANOVA illustrates that these factors have a combined significant impact on the stock price. \n Originality/Value - The study is one of the few to analyze how fundamental factors, including those related to NASDAQ-listed IT services companies (EDPs) over the period 2016-2020, affect stock prices.

Suggested Citation

  • Simon RAFAQAT & Sana RAFAQAT & Sahil RAFAQAT & Saoul RAFAQAT & Dawood RAFAQAT, 2023. "Fundamental factors affecting the share price of Electronic Data Processing (EDP) services companies," Journal of Academic Finance, RED research unit, university of Gabes, Tunisia, vol. 14(1), pages 16-28, June.
    • Handle: RePEc:jaf:journl:v:14:y:2023:i:1:n:606
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • N8 - Economic History - - Micro-Business History
    • G3 - Financial Economics - - Corporate Finance and Governance

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