The Effect of Financial Ratio on Stock Price of Banks Listed on the Indonesia Stock Exchange (IDX)

Abstract

This study aims to analyze the effect of financial ratios on stock prices ­of banks listed on the IDX, how _they influence _return on assets (ROA), debt -equity ratio (DER), price book value (PBV), and net profit margin (NPM)­. This research method uses the descriptive method. The unit of analysis is the banking companies listed on the Indonesia Stock Exchange (IDX). The research sample is 50 bank companies. The analytical method used in this study is multiple linear regression method. The results showed that partially PBV has a positive effect on stock prices, while ROA has no positive effect. DER has no negative effect on stock prices, and NPM has no positive effect on stock prices. Simultaneously ROA, DER, PBV, and NPM affect stock prices at banks listed on the Indonesia Stock Exchange. The limitations of this study are the limitations of the processed data and the variables used. This study ­would be helpful to the equity investment community, as material consideration for investing in companies.