A study on relationship between inflation rate and changes in profitability ratios in Tehran Stock Exchange

Aghaee, M.; Kazempour, M.

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Management Science Letters

ISSN 1923-9343 (Online) - ISSN 1923-9335 (Print) Quarterly Publication Volume 3 Issue 11 pp. 2787-2794 , 2013

A study on relationship between inflation rate and changes in profitability ratios in Tehran Stock Exchange Pages 2787-2794 Download PDF

Authors: Mohammad Ali Aghaee, Morteza Kazempour

Keywords: Gross profit ratio, Inflation rate, Net profit ratio, Return on assets, Return on equity

Abstract: In this paper, we examine the relationship between inflation rate and profitability ratios in the top 36 companies in the Tehran Stock Exchange (TSE). The study uses historical data over the period 2005-2010 and using linear regression methods examines different hypotheses. The main idea of the proposed hypotheses is that there is a significant relationship between the inflation rate and profitability ratios, and the results confirm the significant relationship between the inflation rate and profitability ratios such as return on assets (ROA) ratio, return on equity (ROE) ratio, gross profit (GPR) as well as net profit ratio (NPR). There is no significant correlation, however, between these two variables in past and future periods.

How to cite this paper

 Aghaee, M & Kazempour, M. (2013). A study on relationship between inflation rate and changes in profitability ratios in Tehran Stock Exchange.Management Science Letters , 3(11), 2787-2794.

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