Abstract
This research aims to analyze the influence of profitability ratio, market ratio, and solvency ratio on the share price of companies listed on LQ 45 Index. The independent variables used in this research is Return on Assets (ROA), Return on Equity (ROE), Earning per Share (EPS), Price to Book Value (PBV), Debt to Equity Ratio (DER), and Debt to Assets Ratio (DAR), while the dependent variable used is share price. The samples of this study are companies listed on LQ 45 Index in Indonesia Stock Ex-change from 2010 to 2014. The samples are selected by using purposive sampling method and obtained 15 companies that fulfill the criteria specified. Data are processed using Multiple Regression Analysis and statistical test. The results of this study show that Return on Assets (ROA), Return on Equity (ROE), Debt to Equity Ratio (DER), and Debt to Assets Ratio (DAR) have no effect on share price, while Earning per Share (EPS) and Price to Book Value (PBV) have an effect on share price.
Highlights
Investment is the commitment of a number of funds or other resources done at a certain time, to obtain profit in the future, Tandelilin (2010)
Based on the test results of Multiple Regression Analysis (MRA), the variables of Return on Assets (ROA), Return on Equity (ROE), Earning per Share (EPS), Price to Book Value (PBV), Debt to Equity Ratio (DER) and Debt to Assets Ratio (DAR) simultaneously have an influence on the share price of the companies listed in the LQ-45 Index
Based on the value of R2, it can be seen that the variables of Return on Assets (ROA), Return on Equity (ROE), Earning per Share (EPS), Price to Book Value (PBV), Debt to Equity Ratio (DER), and Debt to Assets Ratio (DAR) have a contribution of 56.2%, the remaining 43.8% is influenced by other variables that are not included in the regression model
Summary
Investment is the commitment of a number of funds or other resources done at a certain time, to obtain profit in the future, Tandelilin (2010). In analyzing and selecting the share, investors need relevant and adequate information through the company's financial statements. The information contained in the financial statements is very useful for the parties who have an interest in the company. The management, as the internal party of the company, uses financial statements as the basis for measuring the company's performance. The external parties, such as investors, use the financial statements to assist the investment activity in the capital market. The analysis of the company‟s financial performance relies heavily on the information provided by the company in the form of financial statements and as one of the important sources of information related to the information about industry, economic conditions, company‟s market share, management quality and other information in measuring the company‟s performance
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