Relation of the Market Value Ratio to the Asset Book Value with Leverage Ratio (The study of Pharmaceutical Companies)
Hamid Saremi1, Behrad Moein Nezhad2, Abdullah Habibi Moheb Saraj3, Hamid Akhavan4
1Dr. Hamid Saremi, Department of Accounting, Quchan Branch, Islamic Azad University, Quchan, Iran.
2Behrad Moein Nezhad, Hakim Nezami Institute of Higher Education, Quchan, Iran.
3Abdullah Habibi Moheb Saraj , Young Researchers and Elite club, Quchan Branch, Islamic Azad University, Quchan, Iran.
4Hamid Akhavan, Young Researchers and Elite club, Quchan Branch, Islamic Azad University, Quchan, Iran.
Manuscript received on November 17, 2016. | Revised Manuscript received on November 21, 2016. | Manuscript published on December 15, 2016. | PP: 12-19 | Volume-2 Issue-7, December 2016. | Retrieval Number: G0131122716
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© The Authors. Published By: Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: Financing and investment decisions of companies, both are the decisions that are taken by forward-looking. In the financing decisions, the company applies the needed funds already so that in the future to be able to perform their obligations to the sponsors. The investment decision, the company will ignore some of the current benefits in the hope of further benefits in the future. Investment in machinery and equipment can apply to prospective profit Return on investment. The purpose of this paper is to examine the components between the market value to the asset book value with leverage ratio in the industry of pharmaceutical companies using the two control variables of the size and profitability. In this paper, for data collection, data of 32 petrochemical companies listed in Tehran during the years of 1388 to 1392 has been analyzed using spss software. The results show that the ratio of market value to book value of property assets with a book leverage and market leverage significant relationship exists.
Keywords: Market value ratio to book value of assets, the ratio of market leverage, book leverage ratio, profitability, firm size.