Abstract

This study aims to estimate and predict the effect of stock prices on profit volatility, net profit, and comprehensive income on the Indonesia Stock Exchange for the period 2014-2019. The study uses quantitative analysis with secondary data consisting of 98 banking companies on the Indonesia stock exchange from 2014 to 2019. The results prove that the share price has a significant effect on net income and comprehensive income but does not have a significant effect on profit volatility, so that net and comprehensive income has relevance to the share price and investors can make both variables in conducting further fundamental research. Previous studies measured the level of volatility of earnings, net income, and comprehensive income on the share price, but when trialing other approaches by causality, share prices affect net income and comprehensive income but not for profit volatility. In this study, however, the change includes detailed income variables due to Financial Accounting Standard No. 1, a shift in terms from profit and loss statements to systematic profit and loss statements.

Highlights

  • Trend of stock price volatility on the financial market is the reason for the comparison of opinions about where the profitability of the industry and a high stock price level is still large and has an effect on the uncertainty of shareholder return

  • This study aims to estimate and predict the effect of stock prices on profit volatility, net profit, and comprehensive income on the Indonesia Stock Exchange for the period 2014-2019

  • The results prove that the share price has a significant effect on net income and comprehensive income but does not have a significant effect on profit volatility, so that net and comprehensive income has relevance to the share price and investors can make both variables in conducting further fundamental research

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Summary

Introduction

Trend of stock price volatility on the financial market is the reason for the comparison of opinions about where the profitability of the industry and a high stock price level is still large and has an effect on the uncertainty of shareholder return. This research is structured to test those variables: stock price / industrial value metrics affected by the benefit dimension are earnings fluctuations, net profits, detailed income at Indonesia stock exchange banks, updates to this research are in maximum income variables, as there have not been a complete income indicator in previous research. The postal jobs include surplus revaluation turnover, gains and losses within a given period, gains and losses in trades in foreign currencies, re-measurement income and losses and productive hedge pieces. These posts are more critical in terms of complete benefit and loss. In this basis it is very important to perform research into which the importance of financial statements can be improved by systematic income calculation at regular value

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