The Relationship Between Investment Ratios and Share Performance of Companies Quoted on the Nairobi Stock Exchange

Abstract

Investors need information in making decisions about their investments. Information for this purpose may be found in the financial statements. This information can be broken down into ratios which makes it easier for the investor to understand the financial statements. This study sought to find a relationship between Share Performance and Investment ratios of companies quoted on the Nairobi stock Exchange. It is indicative from the study that a relationship exists between ratios and Share Prices. Multiple regression analysis was used to establish the relationship between seven variables and share prices were used in the analysis. The relationship was found to be quite strong (r2 of 84% and 89%). The conclusion was that is a strong relationship between investment ratios and share prices of companies quoted on the Nairobi stock Exchange.