Document Type : Research Article
Authors
1 PhD student, Department of Agricultural Economics, University of Tabriz
2 tabriz
3 Professor of Agricultural Economics, Faculty of Agriculture, University of Tabriz, Tabriz, Iran, respectively
Abstract
1. Introduction
The agricultural sector in developing countries, including Iran, has not been able to benefit from its presence in the stock market due to the lack of supporting infrastructure, active capital supply companies, weakness in financial literacy, inadequate technical knowledge, and lack of proper understanding of environmental conditions. Also, over the past ten years, agricultural sector firms have recorded the lowest sales among listed companies. Severe price fluctuations, lack of transparency and information flow in local agricultural product markets, and the widespread presence of brokers and intermediaries in various sectors of distribution and sales of these products are among the problems that have severely weakened the position of agricultural sector firms in the stock market. So, over the past ten years, agricultural sector firms have recorded the lowest sales among listed companies.These problems have mainly affected the agricultural sector of Iran in the absence of a coherent, organized and competitive market. The stock market, by using trading tools and methods, can significantly solve these problems by creating a competitive, transparent and efficient market and provide a very strong potential for agricultural enterprises to enter the stock market in Iran. Entering the stock market and offering shares of agricultural enterprises, in addition to providing capital, will lead to the discovery of the real price of shares and greater prosperity and profitability, and ultimately increasing the financial performance of these enterprises. There is. In order to better understand and further investigate this issue, the present study attempts to study the exact relationship between financial performance and stock price.
2. Materials and Methods
In the present study, the simultaneous equations method has been used to examine the relationship between stock prices and financial efficiency of agricultural firms and companies. In the present study, four financial ratios such as return on assets ratio, total asset turnover ratio, debt-to-capital ratio and Tobin's Q ratio have been used to measure financial efficiency. Also, in the system, a set of control variables that affect the stock prices of companies were considered, such as liquidity, financial leverage, company size and history, sales growth, company cash flow, and profit performance or efficiency. Statistics and information related to performing calculations and estimating models have been collected from various relevant sources and organizations such as Tehran Stock Exchange, Central Bank and Ministry of Agricultural Jihad.
3. Results and Discussion
The results of the system estimation using simultaneous equations have shown that there is a positive and significant relationship between return on assets, asset turnover ratio, debt-to-equity ratio, and Tobin's Q with stock price. While the relationship between debt-to-equity ratio and stock price has been negative and significant. This indicates the importance of paying attention to financial efficiency in determining the value of companies' stocks. In fact, improving financial efficiency makes the company's stocks more valuable to customers. That is, the better the company's financial performance or efficiency, the more investors who are interested and need to buy shares in the company, which also leads to an increase in stock price. An increase in stock price also leads to an improvement in financial ratios, which also requires an increase in financial performance. This shows the importance of considering financial efficiency in determining the value of company shares. In fact, improving financial efficiency makes the shares of companies and firms more valuable to customers. That is, the better the company's financial performance or efficiency, the more investors who are interested and have a demand to buy shares in the company, which also leads to an increase in the stock price. Changes in stock prices affect financial ratios, and these ratios can be used in the evaluation and analysis of companies and investments.
4. Conclusion
Stock price and financial efficiency are interrelated. In other words, stock price de-graphication increases financial efficiency by improving financial ratios. Improving financial ratios and increasing financial efficiency also increase shareholders' expectations for profit and capital increase if the company's financial ratios improve. This also increases the demand for shares and ultimately increases the value and price of shares. By examining the factors affecting financial efficiency and stock price and their relationship in agricultural enterprises, it is possible to identify and eliminate the causes of the decline in the acceptance of agricultural enterprises by the stock market and to encourage and facilitate the presence of these enterprises in the stock market by removing obstacles.
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