RATIO ANALYSIS AND IMPACT OF ITS STOCK PRICES ON COMPANY’S PERFORMANCE

Abstract

This project will discuss the ratio analysis and the impact of financial performance on the stock prices ofEngro Polymer and Chemicals Limited. As financial statements are the financial records ofthe monetary things oforganization to do of an business enterprise which are used as a primarily management’s tool via the executives of the organisation and buyers in assessing the overall function of an organization. Analysis ofthe financial statements helps us in determining the solvency, liquidity and profitability position ofthe Engro. Analysis shows whether the organization is improving or deteriorating from past few years so through the analysis, we deteriorate that the Engro is in consistent improvement. It will also helpful in assess the risk for the investors while investing because while making the investment decision investors search organizations with strong financial position as with the strong financial position organization has increasing stock prices which will have the more returns. We examined the impact of financial performance as it also impacts on the stock prices of organization. Through ratio analysis and econometric analysis, we determined that there is direct relationship between financial performance and stock prices. After performing the analysis, our perceptions and the recommendations about whether to invest in Engro Polymer and Chemicals Limited or not is that Engro is an innovative organization with the consistent improvements in financial position so it will be beneficial and an appealing investment for investors to invest in it with its current financial position.