American Journal of Scientific Research ISSN 1450-223X Issue 57 (2012), pp. 90-95 © EuroJournals Publishing, Inc. 2012 http://www.eurojournals.com/ajsr.htm Relationship between Short-Term Stock Returns and Market Ratios in Iran Mahdi Salehi Corresponding Author, Department of Accounting Ferdowsi University of Mashhad, Mashhad, Iran E-mail:mahdi_salehi54@yahoo.com Farzaneh Nasirzadeh Department of Accounting Ferdowsi University of Mashhad, Mashhad, Iran Abstract The study aims to investigate the relationship between short-term return and market ratios in Tehran Stock Exchange. Statistical society of the study contains 180 companies that 95 companies have been selected as a sample. The results of the study show that there is no relationship between short-term stock returns and the market ratios during 2006 -2010 in Iran. Keywords: Short-term stock return, price/ earnings ratio, earning per share, price market / book ratio. 1. Introduction The study evaluates the relationship between stock return and the market ratio in Tehran Stock exchange. By occurring stock companies and forming the large discussion of ownership’s separation from management and creation a large profit contrast between owners and managers, evaluation of their companies’ and their managers’ and conductors’ performance is from issues which is taken into consider by different classifications like investors credit takers government and even managers. Also from shareholders viewpoint, the amount of wealth increasing is important either from the price increasing and the company value or from the yield. By separation of ownership from management, some criteria should be considered for evaluating companies’ managers and their performance and also a significant criterion for rewarding them such as total income, performance profit, total profit stock temporary yield, value added, Tobin's Q and etc. For absorbing capital and encouraging investors, the commercial units have to obtain enough profit for providing expected yield of the investors. The most important parameter for investing in a company is income and then its profit. Companies which obtain much profit, because the hypothesis is on the fact that this succession will be continued in the future, they are faced with increasing stock buying request and consequently their stock price will be increased and vice versa. According to the above explanations, this research is going to make clear the existence of correlation relationship between the project variables by finding the correlation relationship between stock temporary yield and the market ratios.