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Accounting Information and Share Price Movements in SENSEX–A Special Reference to Automobile Industry


Affiliations
1 Department of Commerce Annamalai, University. Annamalai Nagar, India
2 Annamalai University, Annamalai Nagar, Tamilnadu., India
     

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The study has been carried out to analyse the impact of accounting variables on share price behaviour of SENSEX with reference to automobile industry. Four automobile companies namely Hero Motocorp Ltd. Maruti Suzuki India Ltd. Mahindra and Mahindra Ltd. and Tata Motors Ltd. Included in SENSEX are selected. The study has been made for twelve years from 2004-05 to 2015-16. Nine accounting variables are selected for the study to study impact on share price return on selected companies. The researcher applied ratio analysis as financial tool and descriptive statistics, correlation and regression analysis as statistical tools. The results of ANOVA revealed that the model considered for the study is statistically fit and the entire nine variables explained the share price behaviour to the extent of 42.8 percent. The study found that the variables, Dividend Growth Rate, Operating Profit Ratio, Earning per Share and Book Value per Share had significant positive impact on share price behaviour of selected automobile companies in India. The variable, dividend per share had significant negative impact on share price behaviour of the sample companies. Other variables namely Size of the Firm, Assets Growth Rate and Price Earnings Ratio did not have significant impact on share price behaviour of selected automobile companies in India.

Keywords

Return, Sensex, Accounting, Operating Profit, Automobile.
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  • Accounting Information and Share Price Movements in SENSEX–A Special Reference to Automobile Industry

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Authors

R. Iyappan
Department of Commerce Annamalai, University. Annamalai Nagar, India
L. Ganesamoorthy
Annamalai University, Annamalai Nagar, Tamilnadu., India

Abstract


The study has been carried out to analyse the impact of accounting variables on share price behaviour of SENSEX with reference to automobile industry. Four automobile companies namely Hero Motocorp Ltd. Maruti Suzuki India Ltd. Mahindra and Mahindra Ltd. and Tata Motors Ltd. Included in SENSEX are selected. The study has been made for twelve years from 2004-05 to 2015-16. Nine accounting variables are selected for the study to study impact on share price return on selected companies. The researcher applied ratio analysis as financial tool and descriptive statistics, correlation and regression analysis as statistical tools. The results of ANOVA revealed that the model considered for the study is statistically fit and the entire nine variables explained the share price behaviour to the extent of 42.8 percent. The study found that the variables, Dividend Growth Rate, Operating Profit Ratio, Earning per Share and Book Value per Share had significant positive impact on share price behaviour of selected automobile companies in India. The variable, dividend per share had significant negative impact on share price behaviour of the sample companies. Other variables namely Size of the Firm, Assets Growth Rate and Price Earnings Ratio did not have significant impact on share price behaviour of selected automobile companies in India.

Keywords


Return, Sensex, Accounting, Operating Profit, Automobile.

References