Business, Management and Accounting
2 years ago

Earnings Per Share Boosts Stock Prices, But Not Price Ratios

Journal of Economics and Business
Impact of Earnings Per Share on Stock Prices and Price to Earnings Ratio
Khurshid Ali, Khalid Ashraf Chisti, Irshad Ahmad Malik

Paper Summary

The impact of Earnings Per Share on stock prices and Price to Earnings Ratio was studied for sixteen companies across different industries over eight years. The study found a positive relationship between Earnings Per Share and stock prices, but a low statistical influence on Price to Earnings Ratio. In simple terms, Earnings Per Share affects stock prices, but not significantly impacts Price to Earnings Ratio.

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