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The Effect of Financial Performance on Stock Prices of Automotive and Component Sub Sector Companies in the Indonesia Stock Exchange

Author

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  • Komang Cipta Nugraha

    (Udayana University, Indonesia)

  • Luh Gede Sri Artini

    (Udayana University, Indonesia)

Abstract

The tock price is a measure of investor interest in investing in a company. Companies that have good financial performance are generally the main focus of investors. Analysis of a company can be done by analyzing financial ratios. The phenomenon that occurs in the automotive and component sub-sector companies is the occurrence of stock price fluctuations caused by the company's internal and external factors. This study aims to analyze the effect of financial performance on stock prices of companies in the automotive and component sub-sectors on the Indonesia Stock Exchange. The data used in this study is secondary data, namely by looking at the financial statements of the automotive and component sub-sector companies on the Indonesia Stock Exchange which can be accessed through the website www.idx.co.id. This study uses the method of determining the sample using purposive sampling. The sample used is the automotive and component sub-sector companies on the Indonesia Stock Exchange, with 60 data. The analysis technique used is multiple linear regression. The results show that Return on Assets (ROA) has a positive effect on stock prices of companies in the automotive and component sub-sectors on the Indonesian stock exchange. Current Ratio (CR) has a negative effect on stock prices of companies in the automotive and component sub-sectors on the Indonesian stock exchange. Debt to Equity Ratio (DER) has a negative effect on the stock prices of companies in the automotive and component sub-sectors on the Indonesia Stock Exchange.

Suggested Citation

  • Komang Cipta Nugraha & Luh Gede Sri Artini, 2022. "The Effect of Financial Performance on Stock Prices of Automotive and Component Sub Sector Companies in the Indonesia Stock Exchange," European Journal of Business and Management Research, European Open Science, vol. 7(4), pages 327-331, July.
    • Handle: RePEc:epw:ejbmr0:v:7:y:2022:i:4:id:51595
    DOI: 10.24018/ejbmr.2022.7.4.1595
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