Relationship Between Financial Ratios and Stock Prices: Industry Disparities in Stable Economic Environment in China

Abstract

After the extensive and thorough cleanup and overhaul of the Chinese stock market in 1995, there followed a period of remarkable and noteworthy development, which was accompanied by an equally steady and stable growth of the Chinese economy. In the current economic climate, characterized by favorable conditions, shareholders' demand for energy conversion stock prices has become increasingly intense, thereby necessitating the intervention and involvement of financial ratios in regulating and modulating stock prices. This academic paper will employ a number of analytical tools and techniques, such as literature analysis and case studies, to examine the correlation between financial ratios and stock prices in China. The focus will be on the financial, pharmaceutical, and real estate industries, with particular attention paid to stable economic environments. The findings and results of this study have established that in a stable economic environment in China, the different financial ratios are highly adaptable and malleable to different industries when analyzing stock prices.