An Examination of relationship between solvency ratios with productivity indexes

Subject Areas : Financial Knowledge of Securities Analysis

Kamran leilipoor ¹

1 - ندارد

Received: 2009-12-21 Accepted : 2010-02-07 Published : 2009-12-22

Keywords: productivity indexes, solvency ratios, labor and capital productivity,

Abstract :

In this research, the relationship between productivity indexes with solvency ratios and manner of the relationship has been studied; in order to make use of solvency ratios as replacement of productivity indexes. Among 372 companies listed in Tehran Stock Exchange, 100 companies were chosen at random manner, and the hypothesis were tested in a period of 7 years time, between 1380 and the end of 1386.                                                                      In this research, among financial indexes, solvency ratios (which include debt ratio, interest coverage ratio, debt on stockholders equity ratio and debt on market value stock ratio) and among productivity indexes, labor and capital productivity were chosen.                                                                                              The research proved that among solvency rations just interest coverage ratio is of meaningful relation with productivity indexes, but an appropriate statistical model was not found to replace solvency ratios instead of productivity indexes.