Relation of the Market Value Ratio to the Asset Book Value with Leverage Ratio (The Study of Pharmaceutical Companies)

Financing and investment decisions of companies, both are the decisions that are taken by forward-looking. In the financing decisions, the company applies the needed funds already so that in the future to be able to perform their obligations to the sponsors. The investment decision, the company will ignore some of the current benefits in the hope of further benefits in the future. Investment in machinery and equipment can apply to prospective profit Return on investment. The purpose of this paper is to examine the components between the market value to the asset book value with leverage ratio in the industry of pharmaceutical companies using the two control variables of the size and profitability. In this paper, for data collection, data of 32 petrochemical companies listed in Tehran during the years of 1388 to 1392 has been analyzed using SPSS software. The results show that the ratio of market value to book value of property assets with a book leverage and market leverage significant relationship exists.