Journals Proceedings

Abstract

the current development of the securities and exchange market in Kenya recently has risen with the development of the financial market for derivatives which include swaps, options and futures market. This has seen an upward trend in the quest for investments in the stock markets. The listed companies in the Nairobi Securities and exchange market come broadly from the following sectors; Agricultural sector, Automobiles and Accessories, Commercial and Services, Construction and Allied, Energy and Petroleum, Investment, Telecommunication and Technology, Real Estate Investment Trust, Banking, Insurance, Manufacturing and Allied, Investment Services and the Exchange Traded Fund. Shares are traded from various companies categorized under the following industries. One of the main objectives of the firm is to maximize the shareholders wealth because they are the sole owners of the business. They have entrusted the firm with funds that need to generate a reward. Most of the time the shareholders end up losing their finances through making wrong investments decisions either because of lack of information on the best financial ratios that can be used to determine the financial health of a company. This study therefore sought to establish the best ratios that can be used to identify financial sound investments opportunities for investors.