Abstract:
The main objective of this study is to investigate the company performance and stock return. Company
performance which is the independent variable of this study is represented by price earning (PE) ratio, return on
asset (ROA), debt to equity (DE) ratio, company size and firm’s growth rate and the dependent variable of this
study stock return which is represented by the changes in average share price. The study used annualized data of
20 manufacturing companies listed in Colombo Stock Exchange of Sri Lanka for a period of 5 years, from 2013
to 2017. Ordinary least square is used to estimates the parameters of regression model. Overall results suggest
that company performance and stock return are significantly relate with the prediction of adjusted R2 value of 56%
among the listed manufacturing companies during the periods of 2013-2017. It is observed that the stock return
significantly positively relates to DE ratio and growth rate while it negatively relates to PE ratio, ROA and size.
