JEL classification: C58, D24, G21;
Keywords: Financial ratios, panel regression, stock prices;
Abstract: This paper examines the role of main microeconomic factors on the stock prices of selected Swiss
companies listed on the Six Swiss Exchange. Two basic theoretical approaches and interpretations
of this relationship are frequently used. The efficient market hypothesis (Fama, 1970) assumes that
stock prices already contain all the relevant information and the theory of arbitration (Ross, 1976,
or Chen et al., 1986). The microeconomic factors are based on the financial situation in companies.
Financial ratios, taken from the financial statements of the individual companies, are used for the
analysis. In general, the study confirmed that profitability and debt ratios are the most important
business factors from the prospective of impact on stock prices. The relationship between the
observed variables is explored using panel regression analysis. The generalized method of moments
for constructing a regression model is used. The sample period of the dataset is composed of annual
data from 2006 to 2015.