An investigation of the impact of investors' excitement on price-profit ratio

Price-profit ratio is one of the most important and most-oft used decision-making ratios of sales in the capital market. This ratio can be affected by the investors' excitement, causing some bubbles. This study aimed to examine the impact of investors' excitement on the price-profit ratio in companies accepted in Tehran Stock Exchange. In this research, a systematic elimination method was used and a sample consisting of 90 companies was selected from the companies listed in Tehran Stock Exchange during 2011-2016. The present study is applied and post-hoc regarding its objectives and from a methodological point of view, respectively. Library method was used to collect information and multivariate regression was adopted to test the research hypotheses. The data obtained for the research variables were imported into an Excel sheet and then analyzed using EViews and Stata software. The results of testing the first to third hypotheses revealed that investors' excitement has a significant effect on the price-profit ratio of companies accepted in Tehran Stock Exchange.