The major purpose of this study, is investigating and analyzing the relationship between stock returns and financial ratios of the firms accepted in Tehran Stock Exchange Market. In approaching this purpose, for every group of financial ratios, those ratios which had a low internal correlation were selected as "independent variables", and the stock return was chosen as the "dependent variable". The major hypothesis was that there is a significant relationship between financial ratios & stock returns. The relevant data relating to period 1378-1382 were collected. For testing hypothesis, the regression and panel data techniques were used. The results from the whole industries as well as each single industry, showed that there is a significant relationship between stock returns and selected financial ratios. Therefore, all hypothesis of this study were confirmed.
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