Stock Return Determinants Impact on Organizational Performance

Abstract

There are many variables/factors that have direct collision on stock return and organizational performance. This research work focus to investigate the association/relationship between stock return and its determinants relating to nonfinancial organizations (covering the period of 2010-15) which are listed with the Pakistan Stock Exchange (PSE) formerly known as Karachi Stock Exchange (KSE). In order to work better in today’s globalized era of antagonism and secure day to day business operations with maximizations of return, the observance of existing factors is crucial. Hence it is very necessary to know the factors that have impacts on stock return and performance of the organization. The current study is accomplished with the aim to observe the impacts of factors/determinants which have impacts on return and organizational performance. For this, the determinants are divided into four groups i.e. Market Performance of the organizations, Liquidity level of the organizations, Debt Management Systems and Activity level of the nonfinancial organizations by using secondary data. In this research a sample of 250 organizations was observed for the purpose of analysis. The outcomes indicates that (Tobin’s Q, Sales Growth, ROA, Leverage, Quick Ratio, EA, has significant relationship with dependent variable. However, cash ratio, sales to net fixed assets and sales over total assets has insignificant relationship with dependent variable. Moreover, supplementary studies may observed external factors/variables i.e. rate of inflations, taxation system of the economy, organizational size, etc as well as due attention to the services sector of the economy.