The Effect of Financial Ratios, Firm Size, and Cash Flows from Operating Activities on Earnings per Share

Abstract

Purpose: The study aims to examine the effect of Financial Ratios, Firm size, and Cash Flows from Operating Activities on Earnings per Share.
 
 Theoretical framework: Earnings per share are one of the crucial matters of concern to dealers in securities because of their important role in evaluating investments and the risks surrounding them. Since earnings per share are affected by several factors.
 
 Design/Methodology/Approach: The study sample consisted of industrial companies listed on the Palestine Exchange during the period 2016–2020. Secondary sources were used to collect study data.
 
 Findings: The results of the study showed that there is a statistically significant effect of each company's size and financial leverage on stock returns. However, the results of the study showed that there was no statistically significant effect for each of the liquidity and operating cash flows on the returns per share.
 
 Research, practical & social implications: We can consider that financial ratios, return on equity, debt to equity, price to book value, and cash flow from operating activities altogether affect earnings per share.
 
 Originality/Value: The results of this study provide evidence for stakeholders to be able to judge the efficiency of firms by understanding the factors that affect the size and stability of earnings per share.