The extent of using financial analysis techniques in stock trading decisions at Amman stock exchange

Joint Authors

Mumani, Talal
al-Azzam, Muhammad Fawzi

Source

al-Dar Research Journal for Sustainability

Issue

Vol. 2, Issue 2 (31 May. 2018), pp.37-64, 28 p.

Publisher

al-Dar University College

Publication Date

2018-05-31

Country of Publication

United Arab Emirates

No. of Pages

28

Main Subjects

Economics & Business Administration

Abstract EN

This study examines the extent of using financial analysis techniques in stock trading decisions at Amman Stock Exchange (ASE).

In Addition, this study identifies the limitations and difficulties concerning the use of financial analysis techniques and examining if such limitations and difficulties influence the feasibility and quality of the results obtained by the analysis, therefore, minimize the benefit of using these techniques.

In order to achieve these objectives, a questionnaire was designed and distributed to a sample of investment officers in Jordanian corporations, brokerage firms, and investment funds, as well as the individual investors, where the sample size was (209) of individual investors and companies, and the response rate was 85%.

The main results of the study showed that investors at ASE rely on the financial analysis using financial ratios and horizontal analysis in their investing and stock trading decisions, but they don’t rely on vertical analysis, break-even point (BEP) analysis, and financial failure predicting models.

The results also indicated that there are statistically significant differences among stock investors who use financial analysis techniques regarding the extent of their reliance on the aggregate of these techniques, and these differences are attributable to the date of establishment (institutional investor), job title, age, educational level, academic qualification, and professional certificate.

On the other hand, the results indicated that there are no statistically significant differences among investors who use financial analysis techniques regarding the extent of their reliance on the aggregate of these techniques attributable to the date of their commencement in stocks trading, capital (institutional investor), years of experience in the field of investment, and gender.

Also, the results revealed that most of respondents have agreed on the importance of the limitations and difficulties facing them in the use of financial analysis techniques, and that these limitations and difficulties minimize the benefit of using these techniques and influence the feasibility and quality of the results obtained.

Finally, the results indicated the presence of statistically significant differences among groups of study sample regarding the limitations and difficulties facing them in the use of financial ratios, horizontal analysis, vertical analysis, and break-even point analysis, and the absence of these differences regarding the limitations and difficulties facing them in the use of financial failure predicting models.

In the light of the earlier findings, the study concluded with a number of recommendations, such as the necessity to investors to rely more on debt ratios and ratios that relate to the statement of cash flows in their stock trading decisions, developing unified standard ratios, and increasing the number of investment funds in Jordan

American Psychological Association (APA)

Mumani, Talal& al-Azzam, Muhammad Fawzi. 2018. The extent of using financial analysis techniques in stock trading decisions at Amman stock exchange. al-Dar Research Journal for Sustainability،Vol. 2, no. 2, pp.37-64.
https://search.emarefa.net/detail/BIM-837451

Modern Language Association (MLA)

Mumani, Talal& al-Azzam, Muhammad Fawzi. The extent of using financial analysis techniques in stock trading decisions at Amman stock exchange. al-Dar Research Journal for Sustainability Vol. 2, no. 2 (May. 2018), pp.37-64.
https://search.emarefa.net/detail/BIM-837451

American Medical Association (AMA)

Mumani, Talal& al-Azzam, Muhammad Fawzi. The extent of using financial analysis techniques in stock trading decisions at Amman stock exchange. al-Dar Research Journal for Sustainability. 2018. Vol. 2, no. 2, pp.37-64.
https://search.emarefa.net/detail/BIM-837451

Data Type

Journal Articles

Language

English

Notes

Includes bibliographical references : p. 63-64

Record ID

BIM-837451