The Effect of Profitability Ratio and Market Value Ratio on Companies Stock Prices Listed in Indonesia Stock Exchange (Study on IDX30 2018-2020 Period)

Authors : David; Djoko Hanantijo

Volume/Issue : Volume 6 - 2021, Issue 9 - September

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According to signaling theory, information published by the company could give a positive or negative signal to the investors. These signals could influence an investor’s decision whether to buy or sell a company’s stock, which can affect the stock price in the capital market. One of the information that can be received by investors is the company’s financial performance which is represented by financial ratios. This research aims to analyze and determine the effect of profitability ratio (proxied by Return On Equity) and market value ratio (proxied by Price-to-Earning Ratio) on a company’s stock prices that are listed on the IDX30 Index for the 2018 to 2020 period. The method in this research uses a quantitative approach by using multiple linear regression analysis. With the purposive sampling method, there are twenty companies selected to be the research samples with sixty observations. The results of the research concluded that the Return on Equity (ROE) and Price-to-Earning Ratio (PER) have a positive and significant effect on the stock price.

Keywords : Stock Price, ROE, PER, IDX30


Paper Submission Last Date
31 - December - 2022

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