Stock Return Analysis in The Plantation and Food Crops Sector on The Indonesia Stock Exchange

Abstract

Financial ratios are fundamental factors as a reference for investors in choosing stocks as their investment instrument. This study aims to determine and examine the effect of the current ratio, debt to equity ratio, return on assets, total asset turnover ratio, sales growth, and price to book value on stock returns. This study also aims to compare and strengthen the results of previous studies. By using a purposive sampling technique, a sample of seven companies in the Plantation and Food Crops sectors were obtained that met the sample criteria. The data used in this study were obtained from the financial reports of companies in the Plantation and Food Crops sub-sector that were listed on the Indonesia Stock Exchange for the 2017-2021 period. This research is quantitative with inferential method. The panel data regression analysis method uses EViews Version 12 with the Common Effects Model regression model to test the hypothesis. The results of the study show that the current ratio, debt to equity ratio, return on assets, total asset turnover ratio, sales growth, and price to book value have no significant effect either partially or simultaneously on stock returns, because they are not the main factors sought by investors in selecting investment targets in the Plantation and Food Crops sectors. Thus, it is suggested that investors analyze other factors both internal and external to the company which are thought to have a significant effect on stock returns.