Abstract
Profit & Loss Statement becomes a consideration for investors in making stock transactions. Earnings response coefficient shows the attitude of an investor’s transaction in profit expectancy before or after the publication of the company’s financial statement. The purpose of this study is to examine factors that affect earnings response coefficient. The object of this research is consumer goods manufacturing companies listed on the Indonesia Stock Exchange during 2013-2017. The independent variables used are company size, company growth, earnings growth, and capital structure, while the dependent variable used is earnings response coefficient. The sampling technique used in this research is purposive sampling. Data analysis is done using multiple regression analysis. The results of this study show that earnings growth has a positive effect on earnings response coefficient, but firm size, firm growth, and capital structure have no effect on earnings response coefficient.
Highlights
Financial report or financial statement is one form of business communication that is prepared and presented to its users as a means of making business decisions (IAI, 2018)
In contrast to the results of research conducted by Santoso (2015), company size has no effect on earnings response coefficient (ERC)
The results of research conducted by Fauzan & Purwanto (2017) show that company growth has an effect on earnings response coefficient (ERC)
Summary
Financial report or financial statement is one form of business communication that is prepared and presented to its users as a means of making business decisions (IAI, 2018). Mashayekhi and Aghel (2016) stated that company size had an effect on earnings response coefficient. In contrast to the results of research conducted by Santoso (2015), company size has no effect on earnings response coefficient (ERC). The results of research conducted by Fauzan & Purwanto (2017) show that company growth has an effect on earnings response coefficient (ERC). In contrast to research conducted by Aristawati & Rasmini (2018) and Sandi (2013), company growth has no effect on earnings response coefficient. In connection with the phenomenon and the inconsistency of the results of research conducted by previous researchers, it is important to conduct this research to know the extent of the influence of company size, company growth, profit growth, and capital structure on earnings response coefficient
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