Abstract
The Economic crisis that broke in Indonesia since the mid-year of 1997 caused a lot of business losses. This condition brings effect to the investors to determine their portfolio. One of most popular financial indicator that usually used to predict the business prospect and risk is price earnings ratio (PER). This study is peiformed to find whether PER between manufacturing industrial sectors differ before and after the year 1997. By using two ways ANOVA analysis, so the result of the analysis proved that before and after the year 1997, PER between manufacturing industrial sectors were different. The different were caused by economic crisis. Beside that, this study also peiformed a test of consistency of variables that influence the different of PER for those two condition, before and after the year 1997. The variables that used consist of income smoothing index, beta, financial leverage, earnings growth, ROE, and size. Manufacturing industrial sectors were used as a dummy variable. By using the multiple linier regression analysis, so those six variables that used thrown together could explain the change of PER. The variable of income smoothing index, earnings growth, ROE, and size significantly influence PER at the condition before the year 1997. In other side, after the year 1997, the variable offinancial leverage, and size significantly influence PER. The Third manufacturing industrial sector is significant for those two conditions, before and after the year 1997.
Published Version
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call