The relationship between profitability and Malaysian industrial firms stock value / Milsa Aliu

In this century, most or probably all company's goal is to improve their company value in terms of their stock price as it is important indicator of the company performance level and it will able to attract new investor to invest in their company. This research paper is aimed to investigate the relationship between the Malaysian industrial firms profitability towards its share price using the panel data approach. The sample of this study consist of 115 listed companies in the industrial sector of Bursa Malaysia. The financial data of time span 2010 until 2014 has been used and collected through DataStream software. Stock price act as the dependent variable to represent the stock value of the company. The independent variable of Return on equity (ROE), Earning per share (EPS) and Net profit Margin (NPM) were chosen to represent the profitability ratio of the company. The overall result of this study shows that all of the profitability ratio has significant relationship with stock price of 115 industrial firms listed in Bursa Malaysia.

Keywords:
Industrial firms of Bursa Malaysia, Stock price, Return on equity (ROE), Earning per share (EPS), Net profit margin (NPM)