The stock prices of a business house is guided and governed by a lot of things, the stock prices often reflect the health of the firm and thus have a lot of things involved in it. The stock prices of a firm are guided by the profits or the revenues of the firm. The stock market is a place where the prices of the stock of the business houses fall and rise with the perception of the people about the health of the business house. The stock prices are very dynamic in nature and thus change with very minute disturbances in the market. Internally the stock prices of the business house is mainly effected by the financial statements of the business house followed by a lot of other factors like the trade balances, export and the import data, the taxes paid, the audit results and many other factors. The audit results are like a check for all the financial and the administrative claims made by the business house. The audit results verify or reassure about the financial health of the business house after it has made its initial claims. The taxes paid by the firm are checked in the audits conducted, the taxes paid reflect the amount of the revenues generated by the firm which is again an indirect indicator of the firm’s health. The import and the export data along with the trade balances express the volume of the business generated from the international markets in the country; it provides the firm with an international status and thus adds on to the brand value of the firm. The stock prices reflect the combination of all these factors of the firm and thus generally after the announcements of the financial statements and the audit results of the business houses the stock prices move dynamically. Other than these the stock prices are also affected by a lot of external factors like the economy and the international factors which are beyond the control of the firm. … [Read more...]