In the vast majority of cases, shareholder returns (positive/negative) for a given period are associated with "financial performance" models » (positive/negative) of a company. company in relation to plausible trends previously expected for this period, and/or transactions carried out by company insiders or market abuses on the stock exchange. These two schools of thought have their impact on stock prices (rise/fall) which can also be observed in Pakistan at the KSE. Stock price increases are clustered over time. There is about a 50/50 chance that the extreme return days following a big jump will be of the same sign (Turner and Weigel, November 1992). In this study, ratio analysis is applied to see the changes observed in stock prices which are only earned by the company due to good financial condition. There, companies publish financial statements for external parties, particularly for common shareholders, generally called stock investors. Investors only invest in the stock market after seeing the volatility of stock returns, but the absolute usefulness of accounting information to investors could drive their decisions over time due to changes in the relevance of the information accounting, even if there is no change in the absolute amount of accounting information. information (Melvin C. O'Connor, April 1973). Financial accounting information has become less relevant over time, and returns based on cash flow and earnings have not changed significantly over time (Jennifer and Katherine, Fall 1999). But many studies have shown that investors use this publicly available information for their investment analysis, which typically includes the company's financial analysis, and that they use ratio analysis for this purpose. These ratio analysis techniques provide them with a value...... middle of article ......from California, San Diego and CEPR,26. Rees (1997) The impact of dividends, debt and investment on variable models. Journal of Business Finance and Accounting 24(7) and 8.27. Skinner and Sloan (January 2000). Earnings surprises, growth expectations and stock returns or don't let a profit torpedo sink your portfolio. University of Michigan Business School First version: May 1998. This version: January 200028. Sloan (July 1996). Do stock prices fully reflect accruals and cash flows regarding future earnings. The accounting review, vol. 73, n° 3 pages 289-31529. Balance Sheet Analysis Report of the State Bank of Pakistan (http://www.sbp.org.pk/publications/index2.asp)30. Turner and Weigel, 1992. Daily Stock Market Volatility: 1928-1989. Management Sciences, Vol. 38, No. 11. (pp. 1586-1609 Published by: INFORMS Stable Retrieved from URL: http://www.jstor.org/stable/2632471