Ratio of Market Value to Book Value of Equity and Liquidity Ratios

Investors require information, which is reflected on the financial statements of companies such as incomestatement and balance sheet, to obtain the stocks with higher returns and less risk. Sometimes stockreturns are not reliable measure for shareholders’ decisions. In such cases, the value created by theshareholder can be the best criterion for stock situation measurement. The ratio of stock market value tobook value in such circumstances could reflect the above value. This ratio can also be a criterion forassessing the risk and profitability. Therefore, the overall objective of this study was to investigate therelationship between the ratio of market value to book value of equity and liquidity ratios of listedcompanies in Tehran Stock Exchange. The present study in terms of goal is application type and in termsof data collection method is descriptive and correlational type. All companies listed in Tehran StockExchange are involved in the research population and the least number of samples for testing hypothesesis 111 companies between the years 2009 to 2013. Significance test of the models is done through F andT statistics. The present study results indicate a significant relationship between the ratio of market valueto book value of equity and current and quick ratios, and working capital.

کلیدواژه ها:

Financial Ratios ، Current Ratio ، Accounts Receivable Turnover ، Inventory Turnover ، Asset Turnover ، the Ratio of Market Value to Book Value of Equity