A new study of the impact of financial management decisions on the stock prices of private sector companies in Basra is of great importance. Assistant Lecturer Russell Issam Nouri, a lecturer from College of Industrial Management for Oil and Gas at Basra University for Oil and Gas, published scientific research titled: "The Impact of Financial Management Decisions on Company Share Prices: A Study of Private Sector Companies in Basra" in the American Journal of Economics and Business Management, a journal affiliated with the International Publishing House.
The research seeks to study the impact of financial management decisions on the stock prices of private sector companies in Basra. The research uses quantitative data from 20 companies listed on Basra Stock Exchange covering half a decade (2018-2023) to assess how capital structure, represented by the debt-to-equity ratio; dividend policy, as determined by the payout ratio; and profitability levels, affect stock prices.
The relationships between the financial factors and market value were examined using descriptive statistics, correlation analysis, and multiple regression techniques. The results indicate that a high debt-to-equity ratio leads to lower stock prices, suggesting that increased leverage will increase financial risk and reduce investor confidence. On the other hand, we find evidence of both rising and falling dividend payout ratios. Return on equity (ROE) is not preceded by significant progress toward a profitable alliance relationship; that is, firms with higher profits and higher earnings achieve significantly higher market value in stock prices. With an adjusted return coefficient (R²) of 0.70, the regression model reveals that 70% of stock price volatility can be explained by these financial variables (Table A).
These findings certainly underscore the critical need for the private sector in Basra to practice financial prudence. Firms need to work on capital structure efficiency and a stable dividend policy with higher profitability to outperform their peers and become more attractive to analysts. These findings provide new insights into the relationship between financial decision-making and firm valuation, particularly in emerging market economies.
