Volume 9, Issue 4, April – 2024 International Journal of Innovative Science and Research Technology

ISSN No:-2456-2165 https://doi.org/10.38124/ijisrt/IJISRT24APR172

Study the Relationship between Financial Ratios and

Profitability to Market Value of Companies
Listed on the Stock Exchange of Thailand.
Resource Industry Group Energy and
Utilities Category
Supannika Sanpakaew 1; Nuttanan Thonsrichailert2 and Nattawong Pantakiatpaisan3
1 and 3
Faculty Accounting, Bangkok Thonburi University, Thailand

Abstract:- This research aims to study financial ratios. I. INTRODUCTION

Profitability and market value, to study financial ratios
that are related to profitability, to study financial ratios “Sustainable Investment is an investment concept that
that are related to market value and to study the takes into account environmental performance. Society and
profitability that is related to the market value of Governance (Environmental, Social and Governance: ESG) of
companies listed on the Stock Exchange of Thailand. the business is considered in making investment decisions
Resource Industry Group Energy and Utilities Category along with analyzing the business's financial data. To create
The sample group for this research was companies long-term returns and create positive impacts or reduce
listed on the Stock Exchange of Thailand. Resource negative impacts on society and the environment” (Sustainable
Industry Group Energy and utilities category from 2020 Business Development Center, 2024) Sustainable investing
to 2022, including 3 accounting periods, 57 companies, has come a long way. There are various investment styles or
total sample size 163, including data from financial strategies, such as portfolio risk management by screening
statements. Annual report and Form 56-1. The received negative factors (Negative Screening), such as not investing in
data is analyzed statistically according to the research businesses that may go against good morals and ethics of
objectives with a ready-made program. The statistics society. Screening for positive factors (Positive Screening),
used to analyze the data are descriptive statistics, such as choosing to invest in businesses that are socially
consisting of mean, standard deviation, minimum, responsible. Promote ethical principles or be outstanding in
maximum, quantitative statistics, such as analysis of the ESG operations, etc. And studying financial statements is
Pearson Correlation coefficient. and Multiple important information that reflects the financial health of a
Regression Analysis. business. Financial statements are compiled and are based on
daily bookkeeping. It tracks the funds flowing in and out of the
Major Findings: Financial ratios that are related to business. Financial statements are therefore useful in making
profitability, it is found that the working capital ratio (CR) decisions about expansion and financing. It also plays a role in
and the quick working capital ratio (QR) are related in the marketing decisions by providing information that points to
opposite direction to the return on equity (ROE). Significant which aspects of a company's operations offer the greatest
at the 0.05 level, Debt Ratio (DR) has a relationship in the return on investment. Comparative analysis of financial
opposite direction with Net Profit Rate (NPM), significant at statements is extremely important. Because it makes you know
the 0.05 level. Financial ratios that have a relationship with the progress of operations and the status of the business.
market value found that Debt Ratio (DR) has The Including enabling executives to adjust appropriate policies to
relationship is in the same direction with earnings per share avoid unfavorable situations. Financial statements help
(ESP). The debt-to-equity ratio (DE) is related in the shareholders know about the efficiency of management as well
opposite direction to earnings per share (ESP) significantly as the company's earning capacity and financial strength. In
at the 0.05 level and the ability to do Profit that is related to analyzing financial statements, shareholders can check their
market value. It was found that return on equity (ROE) has ability to earn profits. The current position of the business and
a relationship in the same direction as price to book value the future prospects of the company, which will also allow
(PBV) at a significant level of 0.05. shareholders to make investment decisions in the company
(Advanced Auditing, 2020)
Keywords:- Financial Ratios; Profitability; Market Value.

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Volume 9, Issue 4, April – 2024 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165 https://doi.org/10.38124/ijisrt/IJISRT24APR172

Financial ratio (Financial ratio) is the use of numbers in  To study financial ratios that are related to the market
the financial statements. Let's find ratios for use in analysis and value of companies listed on the Stock Exchange of
comparison with the industry sector. or compare with past Thailand. Resource Industry Group Energy and Utilities
operating results To analyze and evaluate operating results, Category
trends, and risks. of the business better From the study of  To study the profitability that is related to the market
Patcharan Duangkhoncharoen (2018), it was found that value of companies listed on the Stock Exchange of
liquidity makes it known that liquidity in business operations Thailand. Resource Industry Group Energy and Utilities
is capable. In repaying short-term debts when they are due, Category
there are current assets such as cash, receivables, and
inventories that can be circulated or converted into cash to  Research Framework
repay debts in a timely manner. Regarding the ability to earn
profits, it is possible to know how much or how little the
operations of the business are successful and can generate
income in the form of profits for the business and returns to
shareholders. If the business is able to generate high profits,
Holding stocks will also receive high returns. Profitability ratio
and operating ability decreased. The cause is from the
economic situation. causing sales to decrease Resulting in
increased inventory. And if there is no administration In terms
of inventories, keeping the amount to a minimum may cause
capital to sink. and incurred storage costs Showing efficiency
in operations It makes you know the efficiency of making
profits from all the assets that the company has. By using all
assets that are used in actual operations only. This shows the
overall picture of the company that is suitable to bring the rate
of return on investment to a satisfactory level. and including
efficiency in using non-current assets or fixed assets that the
company currently uses In a worthwhile manner, and financial
policy analysis, it is known that the portion of debt that the
business acquires for investment is in proportion to the
shareholder's equity. If the ratio in this aspect is high, it will
inevitably affect the ability to repay debt. And make it known
that the assets you have have come from incurring debts. And Fig.1 Research Framework
the business should have sufficient ability to pay the interest
expenses that are due. Therefore, debt management will be II. LITERATURE REVIEW
efficient.
A. Financial Statements
From the above information, the researcher is interested Financial statements (Kanokwan Phongchaiprasit,
in studying the relationship between financial ratios and 2014) means financial reports to present financial status.
profitability to the market value of companies listed on the Operating results and cash flow of the business in a
Stock Exchange of Thailand. Resource Industry Group Energy structured manner Consists of a statement of financial
and Utilities Category with the objective To study financial position Statement of comprehensive income, statement of
ratios Profitability and market value Study financial ratios that cash flows Statement of changes in shareholders' equity and
are related to profitability. Study financial ratios that are notes to the budget Business finance To provide
related to market value and study the profitability that is information about financial status Performance results and
related to market value of companies listed on the Stock changes Status of the business Which is beneficial to many
Exchange of Thailand. Resource Industry Group Energy and groups of financial statement users in using it to make
utilities category to benefit investors Data analysts, economic decisions. Suthasinee Loha and Atthasuda
entrepreneurs, academics due to the resource industry group Lertkulwat. (2013) stated that financial statements consist
Energy and Utilities Category It is a business group that of Statement of financial position (balance sheet), income
operates with consideration to environmental operations. statement, statement of changes in shareholders' equity,
Society and Governance. notes to financial statements and cash flow statement In
addition, financial ratios are a type of tool used to measure
 Research Objective a company's performance as well. Financial ratios can be
divided into 5 groups: 1) ratios measuring liquidity, 2)
 To study financial ratios Profitability and market value of ratios measuring operating efficiency, 3) ratios measuring
companies listed on the Stock Exchange of Thailand debt serviceability, and 4) ratios measuring ability to make
Resource Industry Group Energy and Utilities Category profits. The financial ratios will show the company's
 To study financial ratios that are related to the profitability operating efficiency in various aspects comparatively. This
of companies listed on the Stock Exchange of Thailand. will be information that investors can use to make
Resource Industry Group Energy and Utilities Category investment decisions in the stock market.

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Volume 9, Issue 4, April – 2024 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165 https://doi.org/10.38124/ijisrt/IJISRT24APR172

Statement of financial position means a financial performance. The analysis of financial statements will
report prepared by a business. to show status The finances be beneficial. Executives in performing their duties To
of the business on any given day It consists of a list of know the weaknesses and strengths of the company's
assets, liabilities, and capital. The statement of financial operating results and financial position. Business in
position is like a picture which shows the quality of the various fields
business. If the business has a large financial statement, But  Employee means an employee of the business. The
if there are elements of each item that are inconsistent with employee wants to analyze the financial statements to
the nature of operations, it cannot be classified as a good know their stability. and the ability to make profits of
business. The larger deficit in the statement of financial the business Therefore, employees need information
position is when the statement of financial position has that will help them evaluate their abilities. Businesses in
assets. Liabilities and capital increase. If the increase in paying compensation, gratuities, pensions, and
assets is due to an increase in liabilities, it means that the employment opportunities
business has an increased burden. At the same time, if the  Lender refers to a bank or business from which a
increase in assets is due to an increase in shareholders' business can borrow money. Lenders want to analyze
equity, it means that the business has Stability financial statements. In order to know the business's
ability to make profits, lenders therefore need
Statement of comprehensive income means a financial information that will help evaluate it. The ability of the
report prepared by an entity. to show results The operations business to repay principal and interest.
of the business for a period of time. This can be monthly,  Product sellers and other creditors refer to businesses
three months, or six months, but is usually one year. with which the business purchases products or assets.
Contains a list of income and expense categories. Reading Product sellers and other creditors. These groups want
the income statement If tools are used to help, it will give a to analyze financial statements to know the business's
clearer picture of how the business is performing. There is ability to make profits and liquidity. Therefore, they
an income structure. What does it consist of? Is the net need information that will help them evaluate the
profit of the project reasonable or is there any doubt? and business's ability to repay its debts.
can also see future trends that Is the business likely to  Customer means the person the business sells products
continue operations or is there a chance of encountering to. Customers want to analyze financial statements to
difficult storage problems? These things help to be used as know the stability of the business. Therefore, customers
information for making effective investment decisions. need information that will help evaluate the business's
There are more principles and accuracy. This equates to ability to continue operating.
reducing the risk of loss due to wrong investment selection.  Auditor means someone who inspects the accounting
work of the business. to report in comments to the
Financial statements are one piece of information that financial statements for shareholders and related parties
will help make investment decisions more efficient and such as investors, creditors, government, and
create more profits. Or in other words, It reduces the risk of government agencies, etc., so that they know that the
loss from wrong investments. However, good performance audited financial statements have reported the financial
in the financial statements, whether the version has been status and operating results correctly as they should and
audited by an accountant or not, does not mean that it Prepared according to generally accepted accounting
represents a good financial position. It is always good for principles. The audit must carry out audit work to obtain
the business, so read and interpret to find the truth. From sufficient evidence The evidence from the analysis of
financial statements, it is an extremely important point that the financial statements will help support the auditor in
will help evaluate the value of that business. and be able to making conclusions. Opinion on financial statements
make correct and principled decisions with more confidence
 Government and government agencies refer to the
 Each Financial Statement Analyst has Different Revenue Department and Department of Business
Objectives. Depending on the Type of Financial Development, etc. Government and government
Statement Analyst, Including: agencies want to analyze financial statements to know
about operations and allocations. The business's
 Investors refer to owners of capital including resources, therefore, the government and government
investment advisors. Investors want to analyze their agencies need information that will help them evaluate
budget. To know about the risks and returns from their ability to Making a profit and complying with the
investing. Therefore, investors need information that specified criteria
will help them You can evaluate whether you should  Students mean those who study topics related to
continue to buy, sell, or hold that investment. Including financial statement analysis. Students want to Financial
evaluating the business's ability to Paying dividends to analyze statements for practice before graduation.
investors Therefore, students need information on all aspects to
 Executive means a person who is responsible for practice analyzing financial statements. Finance to gain
managing the business to operate efficiently and experience before using it for work.
Achieve business goals To perform their duties to the
best effect, executives must have both short-term and
long-term planning, controlling, and evaluating

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ISSN No:-2456-2165 https://doi.org/10.38124/ijisrt/IJISRT24APR172

 Public refers to the general public who are interested in from the past to the present to see in which direction they
The public wants to analyze financial statements in have changed or to compare with other businesses (Surakit
order to Know about the operations of the business. Khawongpuen, 2016). Financial ratios are divided into:
Therefore, the public needs information that will help Many types such as Liquidity Ratio, Efficiency Ratio,
them evaluate the impact on Operations that affect Profitability Ratio (Profitability Ratio), Debt Service Ratio
society, such as employment and purchasing products (Leverage Ratio) and Market Value Ratio (Market Value
from local producers, etc. Ratio).
 Competitors mean businesses that operate in the same
way as the business and whose business sizes are not Debt Ratio (Debt Ratio) is a ratio that shows how
much different. Competitors want to analyze financial much of a business's debt is to its total assets. To see what
statements in order to know the strengths and proportion of the investment in the assets of the business
weaknesses of the business. Therefore, competitors comes from external loan sources and also to measure the
They need all kinds of information that will help them ability to repay the debt of the business. For this ratio, if it
evaluate their strengths and weaknesses. has a high value, it indicates that the business has a high
debt burden. There is a high interest expense. Business
B. Financial Statement Analysis management may be risky.
Chayada Chuangsang (2020) and Paweena Saeju
(2020) said that analyzing financial statements is to know Current assets ratio (Current Ratio) expresses the rate
financial strengths and weaknesses. of the business in of ability to convert assets into money to be used to repay
various aspects according to the needs of the analyst The short-term debts. If the result is greater than 1, it indicates
main principle is comparison. This will allow you to know that the business's current assets are sufficient to pay off
where in the business there are problems that need to be short-term liabilities. The business has flexibility in
fixed and improved. And where the business is strong is repaying short-term debt. But if the result is less than 1, it
considered a competitive advantage. There are 3 types of means that the business has more current debt than current
comparison of financial statements as follows: assets. It may result in problems in repaying this debt in the
short term. What is a good current assets ratio? 2:1 and
 Comparison with historical data of the business To be from the study of Khwannapa Seksiri, Somjai Bunmuenwai
informed of the development or The changes in the and Thanapon Wimun-at (2018), it was found that the
business have progressed or worsened in what areas? working capital ratio (CR) is related to the price of
And be careful whether the businesses are in the same securities. Statistically significant (P<0.01) and has a ratio
normal situation or not in order to make comparisons. If that is related to stock prices and Watchthanaphong Yodraj
the situations are different, they cannot be compared. and Pantip Yangklan (2021) found that the working capital
 Comparison with competing businesses To know the ratio is related to the ability to make a profit also.
competitiveness and potential of the company compared
to competitors in what order. By comparing the The Quick Ratio is a financial ratio calculated from
financial statements of only one year. between the current assets, excluding inventories (because some types
business and its competitors or compare going back of inventories cannot be turned into cash within one year)
many years, which can be done But conditions such as and current liabilities. This will indicate the ability of the
size and type of business should be taken into account. business to repay short-term debt and from the study of
Are they similar or similar? Are the business structures Khwannapa Seksiri, Somjai Bunmuenwai and Thanapon
similar? If there are too many differences, comparing Wimun-at (2018), it was found that the quick working
financial statements cannot be done. capital ratio (QR) is related to the price. Securities
 Comparison with industry averages It is a good criteria Statistically significant (P<0.01)
and quite popular. This is because the average of the
industry in which the business operates is used. Can be Debt to Equity Ratio (Debt to Equity Ratio) is a ratio
used as a standard in The comparison is pretty good. showing debt to equity ratio. To measure how much capital
Because using the average helps reduce some of the the business has used from borrowings compared to the
bias in the data. But the problem encountered is the capital of the business. For this ratio, if it has a high value,
inability to find complete and complete information on it indicates that the business has high borrowings compared
companies in the same industry. Even though it can be to the business's capital. This will result in the business
applied It may require quite a lot of resources in terms having to pay interest on borrowings. It has an effect on the
of time, personnel, and funds. which may not be worth profit of the business according to Wariya's study.
it for small businesses Suwaphinyopas and Daranee Uachanajit (2013) found that
the debt to equity ratio has a negative impact on the market
Financial ratios (Piyanat Kanchanarat, 2021). They price to book value ratio. and has a significant positive
are tools used to analyze financial reports of a business in impact on the dividend yield at the levels of 0.01 and 0.05.
order to evaluate its financial position. Business
performance Using numerical data from financial Return On Assets (ROA) is a ratio used to measure
statements to find various ratios to be able to analyze the the ability of a business to utilize its assets to create profit.
data for easy understanding. Able to compare operations This ratio is considered a measure of efficiency in using
assets. The total of the business divided by the rate of

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Volume 9, Issue 4, April – 2024 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165 https://doi.org/10.38124/ijisrt/IJISRT24APR172

return on total assets is high compared to the average rate investors in the market expect that Such companies have
of return on total assets of the industry. It shows that the high growth potential while also representing a high level
business has high efficiency in using total assets. The of risk. The findings of Rasamee Srilawong (2018) found
higher this ratio, the better. And from the study of Nathida that the market price to book value (P/BV) ratio has an
Munthongjad (2019), it was found that the ratio of net impact on security prices in the same direction as security
profit to total assets (ROA) is related in the same direction prices. Real estate and construction industry group in the
as the rate of return on the difference between securities MAI Stock Exchange at a confidence level of 95% and
prices. at the significance level of 0.05 because when the Kwannapa Seksiri, Somjai Bunmuenwai and Thanapon
business has the ability to manage or use assets that Wimoon-at (2018) found that the ratio of market value to
generate high profits and the study of Kulnan Noramat book value per share ( P/BV) is a ratio that is related to the
(2022). Results of the study: Profitability ratio has no security price.
relationship with stock prices. Statistically significant at the
alpha level equal to .05 and Wariya Suwaphinyopas and C. Restrictions on using Financial Ratios
Daranee Uechanajit (2013) also found that the rate of return
on assets has a positive impact on the market price to book  Financial ratios are obtained from the analysis of
value ratio. And the gross profit rate has a negative impact financial statements, which are numbers that have
on the dividend yield at the significance level of 0.05 and occurred in the past. Although studying a company's
Oratai Yuboon (2020) found that the rate of return on total financial ratios continuously for many years can make it
assets And the rate of return on equity is also significantly possible to predict future trends, But it does not mean
related to the market capitalization at 0.01. that it will actually happen in the future because there
are many other external factors that are important
Return on Equity (ROE) is a ratio that shows the variables affecting the business's performance.
ability to make profits from shareholders' equity. This ratio Therefore, in addition to analyzing financial statements,
has a higher value. The trend improves or maintains the You should study and predict trends in other factors in
consistency of this high return. That means being able to making decisions, such as economic conditions and
grow and compete in the market. Including being attentive industry trends. Legal requirements, prices, exchange
to creating returns for shareholders From the study of rates or interest rates, etc.
Wariya Suwaphinyopas and Daranee Uechanajit (2013), it  Comparing financial ratios of various companies, those
was found that the rate of return on equity has a positive companies should use accounting methods. accounting
impact on the market price to book value ratio at the period Asset valuation policy And depreciation in the
significance level of 0.01. same way would be a good comparison. In reality, this
is difficult because each business uses different
Net profit margin Net profit margin shows the accounting methods.
efficiency of a company's operations in making a profit  The ratio obtained by comparing items in the statement
after all costs and income taxes have been deducted. The of financial position recorded at a point in time with
higher this ratio, the better. items in the income statement recorded for an
accounting period of 1 year. Calculations should
Earnings per Share (EPS) is a ratio that shows the therefore use items in the statement of financial position
business's ability to make profits from the total number of in weighted numbers. Average the beginning of the year
common shares available. Investors will know how much and the end of the year to give a clear meaning.
profit the investor will receive per unit share. The higher it  Considering financial ratios, it is not necessary to use all
is, the better. ratios in the analysis. But you can choose to use certain
ratios which are suitable for the purpose of analysis. But
Market price to net profit ratio (P/E Ratio) refers to you should consider covering all types of financial
the comparative ratio between the market price of a stock ratios so that you can analyze all aspects together before
and its net profit per share. that the company achieved in deciding to invest.
the most recent year It is a value that will be heard often.
The best because it can be compared to both individual From the study, the researcher knows the importance
stocks. and overall market conditions. A study by Wariya of Financial ratios include debt ratios. Working capital ratio
Suwaphinyopas and Daranee Uechanajit (2013) found that Quick working capital ratio and debt to equity ratio
the rate of return on assets has a positive impact on the Profitability consists of the rate of return on assets. Rate of
market price to book value ratio. And gross profit margin return on equity and net profit margin Market value
has a negative impact on dividend yield at the significance consists of earnings per share, price per share/net earnings
level of 0.05. per share. and price to book value of shares Therefore, it
was used as a variable for the study.
Market price to book value ratio (P/BV Ratio) means
the comparative ratio of the market price of common stocks
to the book value of 1 common share according to the latest
financial statement of the issuing company. This ratio tells
you how many times the stock price at that time is higher
than the book value. If it is high, it means that general

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III. RESEARCH METHODOLOGY equity The lowest value is -15.24, the highest value is
45.13, the average is 10.6266 and the standard deviation is
Population used in this research is a company registered on 10.4000, and the net profit margin The lowest value is -
the Stock Exchange of Thailand Resource Industry Group 61.00. The highest value is 372.58. The average is 20.3743
Energy and utilities category from 2020 to 2022, a total of 3 and the standard deviation is 41.5555.
years, 69 companies.
Analysis of financial factors with descriptive statistics
The sample group for this research was companies listed found that earnings per share had a minimum value of 0.16,
on the Stock Exchange of Thailand. Resource Industry Group a maximum value of 247.36, an average of 14.1475 and a
Energy and utilities category from 2020 to 2022, a total of 3 standard deviation of 33.5227.
accounting periods. Except for companies that are undergoing
business rehabilitation. The company was undergoing various Price per share/earnings per share has the lowest value
stages of the recovery process at the time of the study. These of -5.50, the highest value of 331.24, the average is 20.4642
companies cannot disclose their financial statements. and and the standard deviation is 31.0038 Price to book value of
companies that report incomplete financial statement shares It has a minimum value of 0.33, a maximum value of
information Because the research team needs to have access to 11.65, an average value of 1.8527 and a standard deviation
complete information. To use data in research to produce results of 1.5643.
according to the research objectives. (Stock Exchange of
Thailand, 2024) totaling 57 companies, totaling 163 samples. Table 1 Analysis of Multiple Regression Coefficients,
Financial Ratios and Profitability Return on Assets
The tools used for the study are Secondary data are
financial statements, annual reports and Form 56-1 displayed on
the Stock Exchange of Thailand website. Companies listed on
the Stock Exchange of Thailand Resource Industry Group
Energy and utilities category from 2020 to 2022, a total of 3
accounting periods. collect data and interpret data results,
consisting of

Financial ratios include debt ratios. Working capital ratio

Quick working capital ratio and debt to equity ratio

Profitability consists of the rate of return on assets. Rate of

return on equity and net profit margin

Market value consists of earnings per share, price per

share/net earnings per share. and price to book value of shares

Statistics used in data analysis are descriptive statistics,

consisting of mean, standard deviation, minimum, maximum,
quantitative statistics, including analysis of the Pearson Objective 2. Table 1 Analysis of multiple regression
Correlation Coefficient. and Multiple Regression Analysis. coefficients on financial ratios and profitability. It was
found that the results of the analysis of the primary
IV. RESULTS variables Debt ratio (DR), working capital ratio (CR), quick
working capital ratio (QR), debt-to-equity ratio (DE) and
Objective 1. Analysis of financial ratios using the variable return on assets (ROA) can be explained as
descriptive statistics. It was found that the debt ratio The follows. The financial ratio is equal to 0.223 (R=.223a).
minimum value is 0.82, the maximum value is 0.00, the There is a possibility of forecasting when all variables
average value is 0.4733, and the standard deviation is combined are equal to 0.050(R Square=.050), meaning the
0.1975. Working capital ratio The lowest value is 0.17, the primary variable used in the study is debt ratio (DR). )
highest value is 644.17, the average is 10.9381 and the Working capital ratio (CR), quick working capital ratio
standard deviation is 10.5244. Quick working capital ratio (QR), debt-to-equity ratio (DE) and variables based on
It has a minimum value of 0.13, a maximum value of 4.45, return on assets (ROA) can explain financial ratios of 5.0
an average value of 10.2148 and a standard deviation of percent, of which the remaining percentage 95.0 is due to
70.5791 and a debt-to-equity ratio. It has a minimum value the influence of other variables that were not studied. The
of 0.01, a maximum value of 4.45, an average value of estimated standard error of 7.16 is an estimate of the
1.2172 and a standard deviation of 0.95362. financial ratio and model deviation data
Analysis of profitability using descriptive statistics
found that the rate of return on assets The lowest value is -
3.90, the highest value is 58.22, the average is 7.5540 and
the standard deviation is . 7.2575Return on shareholders'

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Table 2 Analysis of Multiple Regression Coefficients, Table 3 Analysis of Multiple Regression Coefficients on
Financial Ratios and Profitability Rate of Return on Equity Financial Ratios and Profitability. Net Profit Margin

Table 2 Analysis of multiple regression coefficients Table 3 Analysis of multiple regression coefficients of
on financial ratios and profitability. It was found that the financial ratios and profitability. It was found that the
results of the analysis of the primary variables Debt ratio results of the analysis of the primary variables Debt ratio
(DR), working capital ratio (CR), quick working capital (DR), working capital ratio (CR), quick working capital
ratio (QR), debt to equity ratio (DE) and variable based on ratio (QR), debt-to-equity ratio (DE) and the variable based
return on equity (ROE) can be explained as follows. The on net profit margin (NPM) explain the results as follows.
financial ratio is equal to 0.223 (R=.223a). There is a The financial ratio is equal to 0.371 (R=.371a). There is a
possibility of forecasting when all variables combined are possibility of forecasting when all variables combined are
equal to 0.050(R Square=.050), meaning the primary equal to 0.138(R Square=.138), meaning the primary
variable used in the study is debt ratio (DR). ) Working variable used in the study is debt ratio (DR). ) Working
capital ratio (CR), quick working capital ratio (QR), debt- capital ratio (CR), quick working capital ratio (QR), debt-
to-equity ratio (DE) and variables based on return on equity to-equity ratio (DE) and variables based on net profit
(ROE) can explain the financial ratio of 4.4 percent, which margin (GPM) can explain financial ratios of 13.80 percent,
The remaining 96.6% is due to the influence of other of which the remaining 86.20 percent are Caused by the
variables that were not studied. The estimated standard influence of other variables that were not studied. The
error of 10.30 is an estimate of the financial ratio and estimated standard error of 39.07 is an estimate of the
model deviation data. financial ratio and model deviation data.
The results of the multiple regression analysis found The results of the multiple regression analysis found
that Working capital ratio (CR) and quick working capital that The debt ratio (DR) is significantly related to the net
ratio (QR) are significantly related to return on equity profit rate (NPM) at the 0.05 level. Then, the two variables
(ROE) at the 0.05 level. Then, the two variables are tested are used to find the relationship between the variables with
to find the relationship between Variables with the the Correlate command. The independent variable debt
Correlate command, the independent variable working ratio (DR) and the dependent variable rate. Net profit
capital ratio (CR) and the dependent variable return on (NPM) found that the debt ratio (DR) was equal to -.343,
equity (ROE), found that the working capital ratio (CR) which is a negative value. The results can be interpreted as
was equal to -.129, which is a negative value. The results Debt ratio (DE) is related to net profit margin (NPM) and in
can be interpreted as The working capital ratio (CR) is the opposite direction.
related to the rate of return on equity (ROE) and has a
relationship in the opposite direction and the relationship
between the variables with the Correlate command, the
independent variable Quick Working Capital Ratio (QR)
and the dependent variable. Return on Equity (ROE) found
that the quick working capital ratio (QR) was equal to -
.125, which is a negative value. The results can be
interpreted as Quick ratio (QR) is related to return on
equity (ROE) and in the opposite direction.

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Table 4 Analysis of Multiple Regression Coefficients, Table 5 Analysis of Multiple Regression Coefficients of
Financial Ratios and Market Value, Earnings Per Share Financial Ratios and Market Value Price Per
Share/Earnings Per Share

Objective 3. Table 4. Analysis of multiple regression Table 5 Analysis of multiple regression coefficients of
coefficients of financial ratios and market value. It was financial ratios and market value. It was found that the
found that the results of the analysis of the primary results of the analysis of the primary variables Debt ratio
variables Debt ratio (DR), working capital ratio (CR), quick (DR), working capital ratio (CR), quick working capital
working capital ratio (QR), debt to equity ratio (DE) and ratio (QR), debt-to-equity ratio (DE) and the variables
earnings per share (ESP) dependent variable explain the based on price per share/earnings per share (PE) explain the
results as follows. The financial ratio is equal to 0.225 results as follows. The financial ratio is equal to 0.136
(R=.225a). There is a possibility of forecasting when all (R=.136a). There is a possibility of forecasting when all
variables combined are equal to 0.051 (R Square=.051), variables combined are equal to 0.018 (R Square=.018),
meaning the primary variable used in the study is debt ratio meaning the primary variable used in the study is debt ratio
(DR). ) Working capital ratio (CR), quick working capital (DR). ) Working capital ratio (CR), quick working capital
ratio (QR), debt-to-equity ratio (DE) and earnings per share ratio (QR), debt-to-equity ratio (DE) and variables based on
(ESP) variables can explain 5.10 percent of the financial price per share/earnings per share (PE) can explain the
ratio, with the remaining 94.90 percent. Caused by the financial ratio of 1.80 percent, which part The remaining
influence of other variables that were not studied. The 98.20% is due to the influence of other variables that were
estimated standard error of 2127.95 is an estimate of the not studied. The estimated standard error of 31.13 is an
financial ratio and model deviation data. estimate of the financial ratio and model deviation data.

The results of the multiple regression analysis found Table 6 Analysis of Multiple Regression Coefficients of
that Debt ratio (DR) and debt to equity ratio (DE) are Financial Ratios and Market Value Price Per Book Value of
significantly related to earnings per share (ESP) at the 0.05 Shares
level. Then, the two variables are tested to find the
relationship between the variables using the term Order to
Correlate the independent variable Debt Ratio (DR) and the
dependent variable Earnings per Share (ESP), found that
Debt Ratio (DR) has a value equal to .085, which is a
positive value. The results can be interpreted as Debt ratio
(DR) is related to earnings per share (ESP) and is related in
the same direction. and the relationship between the
variables with the Correlate command, the independent
variable debt-to-equity ratio (DE) and the dependent
variable earnings-per-share (ESP), found that the debt-to-
equity ratio (DE) was equal to -.004. which is negative The
results can be interpreted as Debt-to-equity ratio (DE) is
related to earnings per share (ESP) and in the opposite
direction.

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Table 6 Analysis of multiple regression coefficients of Table 8 Analysis of Multiple Regression Coefficients on
financial ratios and market value. It was found that the Profitability with Market Value Price Per Share/Earnings
results of the analysis of the primary variables Debt ratio Per Share
(DR), working capital ratio (CR), quick working capital
ratio (QR), debt-to-equity ratio (DE) and price-to-book
value (PBV) variables explain the results as follows. The
financial ratio is equal to 0.241 (R=.241a). There is a
possibility of forecasting when all variables combined are
equal to 0.058 (R Square=.058), meaning the primary
variable used in the study is debt ratio (DR). ) Working
capital ratio (CR), quick working capital ratio (QR), debt-
to-equity ratio (DE) and price-to-book value (PBV)
variables can explain the financial ratio of 4.20 percent, of
which the remaining 100 percent. 95.80 each is due to the
influence of other variables that were not studied. The
estimated standard error of 1.54 is an estimate of the
financial ratio and model deviation data.

Table 7 Analysis of Multiple Regression Coefficients on

Profitability with Market Value, Earnings Per Share

Table 8 Analysis of multiple regression coefficients

on profitability found that Results of analysis of primary
variables Return on assets (ROA), return on equity (ROE),
and net profit margin (NPM) and the variables price per
share/earnings per share (PE) explain the results as follows.
Profitability is equal to 0.169 (R=.169a). There is a
possibility of forecasting when all variables combined are
equal to 0.029(R Square=.029), meaning the primary
variable used in the study is rate. Return on Assets (ROA),
Return on Equity (ROE) and Net Profit Margin (NPM) and
price per share/earnings per share (PE) variables can
explain the percentage of profitability. 2.90, of which the
remaining 97.10% is due to the influence of other variables
that were not studied. The estimated standard error of 30.87
is an estimate of profitability with model deviation data.

Table 9 Analysis of Multiple Regression Coefficients on

Profitability with Market Value Price Per Book
Value of Shares
Objective 4. Table 7 Analysis of multiple regression
coefficients on profitability found that Results of analysis
of primary variables Return on assets (ROA), return on
equity (ROE), and net profit margin (NPM) and the
dependent variable earnings per share (ESP) explain the
results as follows. Profitability is equal to 0.117 (R=.117a).
There is a possibility of forecasting when all variables
combined are equal to 0.014(R Square=.014), meaning the
primary variable used in the study is rate. Return on assets
(ROA), return on equity (ROE), and net profit margin
(NPM) and the earnings per share (ESP) variable can
explain 1.40 percent of profitability, with the remaining
98.6% is due to the influence of other variables that were
not studied. The estimated standard error of 33.61 is an
estimate of profitability with model deviation data.

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Table 9 Analysis of multiple regression coefficients Debt ratio (DR) is related to net profit margin (NPM) and
on profitability found that Results of analysis of primary in the opposite direction. Consistent with Krittawat
variables Return on assets (ROA), return on equity (ROE), Techathamwat (2019), conducted a study and analysis of
and net profit margin (NPM) and price-to-book value financial ratios regarding profitability of Advanced Info
(PBV) variables explain the results as follows. Profitability Service Public Company Limited compared to competitors
is equal to 0.152 (R=.152a). There is a possibility of in telephone network service providers. It was found that
forecasting when all variables combined are equal to the factors that affect the profitability ratio of competing
0.023(R Square=.023), referring to the primary variables companies that provide telephone network services with
that are used for study. Return on assets (ROA), return on statistical significance at the 0.05 level include the total
equity (ROE), and net profit margin (NPM) and price-to- asset turnover ratio. Debt to equity ratio Market share and
book value (PBV) variables can explain the profitability of number of telephone number users And the study results of
2.30 percent. The remaining 97.70% is due to the influence Watchthanaphong Yodrat and Panthip Yangklan (2021)
of other variables that were not studied. The estimated also found that the debt to equity ratio It is also related to
standard error of 1.56 is an estimate of profitability with the ability to make a profit.
model deviation data.
The results of the multiple regression analysis found
The results of the multiple regression analysis found that Debt ratio (DR) and debt to equity ratio (DE) are
that Return on equity (ROE) is significantly related to price significantly related to earnings per share (ESP) at the 0.05
to book value (PBV) at the 0.05 level. Then, both variables level. Then, the two variables are tested to find the
are tested to find the relationship between the variables relationship between the variables using the term Order to
with the Correlate command. The independent variable Correlate the independent variable Debt Ratio (DR) and the
return on equity (ROE) and the dependent variable price to dependent variable Earnings per Share (ESP), found that
book value (PBV) found that the return on equity (ROE) the Debt Ratio (DR) has a value equal to .085, which is a
was equal to .100, which is a positive value. The results can positive value. The results can be interpreted as Debt ratio
be interpreted as Return on equity (ROE) is related to price (DR) is related to earnings per share (ESP) and is related in
to book value (PBV) and is related in the same direction. the same direction. Piyanat Kanchanarat (2021) studied the
relationship between financial ratios, cash flow and
V. DISCUSSION enterprise value of companies listed on the stock exchange.
: Case studies of countries in development projects The
The results of the multiple regression analysis found trilateral economic zone of Indonesia, Malaysia and
that Working capital ratio (CR) and quick working capital Thailand found that in Malaysia the ratio of debt to assets
ratio (QR) are significantly related to return on equity was found to have a significant negative relationship with
(ROE) at the 0.05 level. Then, the two variables are tested enterprise value and Saranya Singwarat (2019) studied the
to find the relationship between The independent variable, influence of financial ratios on In terms of operational
working capital ratio (CR) and the dependent variable, efficiency that affects the profitability of companies listed
return on equity (ROE), found that the working capital ratio on the Stock Exchange of Thailand, the SET 100 group
(CR) had a value equal to -.129, which is a negative value. found that the debt-to-asset ratio has an influence and is
The results can be interpreted as The working capital ratio related to the gross profit ratio.
(CR) is related to the return on equity (ROE) and has a
relationship in the opposite direction, consistent with The relationship between the independent variable
Watchthanaphong Yodrat and Panthip Yangklan (2021) debt-to-equity ratio (DE) and the dependent variable
who studied the relationship between the ratio. Financial earnings-per-share (ESP) found that the debt-to-equity ratio
and profitability of food and beverage business groups (DE) was equal to -.004, which is a negative value. The
listed on the Stock Exchange of Thailand The results of the results can be interpreted as Debt-to-equity ratio (DE) is
study found that The working capital ratio is related to related to earnings per share (ESP) and in the opposite
profitability. The relationship between the independent direction. Consistent with Piyanat Kanchanarat (2021),
variable Quick Working Capital Ratio (QR) and the studied the relationship between financial ratios, cash flow,
dependent variable Return on Equity (ROE) found that the and enterprise value of companies listed on the stock
Quick Working Capital Ratio (QR) has a value equal to - exchange: a case study of countries in the development
.125, which is a negative value. The results can be project group. The trilateral economic zone of Indonesia,
interpreted as Quick ratio (QR) is related to return on Malaysia and Thailand found that the debt to equity ratio
equity (ROE) and in the opposite direction. There is a negative relationship with enterprise value and
the results of the study of Khwannapa Seksiri, Somjai
The results of the multiple regression analysis found Bunmuenwai and Thanapon Wimun-at (2018) studied the
that The debt ratio (DR) is significantly related to the net influence of financial ratios on the stock market price of
profit rate (NPM) at the 0.05 level. Then, the two variables companies listed on the Stock Exchange of Thailand: A
are used to find the relationship between the variables with case study of the service industry found that Working
the Correlate command. The independent variable debt capital ratio (CR)Quick working capital ratio (QR) is
ratio (DR) and the dependent variable rate. Net profit related to stock prices. Statistically significant (P<0.01) and
(NPM) found that the debt ratio (DR) was equal to -.343, Wariya Suwaphinyopas and Daranee Uachanajit (2013)
which is a negative value. The results can be interpreted as

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found that the debt to equity ratio has a negative impact on  Suggestions for Next Research
the market price to book value ratio as well. This study was a study of only a sample of those listed
on the Stock Exchange of Thailand. Resource Industry
The results of the multiple regression analysis found Group Energy and Utilities Category in the fiscal year 2020
that Return on equity (ROE) is significantly related to price to 2022 and study historical data only. Therefore, the next
to book value (PBV) at the 0.05 level. Then, both variables study should also have a forecast or forecast for the future
are tested to find the relationship between the independent in order to be beneficial to the researcher.
variable, rate of return. on shareholders' equity (ROE) and
the variable based on price to book value (PBV). It was REFERENCES
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