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Financial Ratios and Stock Return in the Food and Beverage Company

Author

Listed:
  • Dwijayani, Henny

    (Universitas Darul Ulum Jombang)

  • Marzuki, Moh Idris

    (Universitas Darul Ulum Jombang)

  • Sari, Linda Ratna

    (Universitas Darul Ulum Jombang)

  • Muchtar, Muchtar

    (Universitas Darul Ulum Jombang)

  • Aslichah, Aslichah

    (Universitas Darul Ulum Jombang)

Abstract

This study uses financial ratio analysis to investigate the company's stock returns. This study aims to determine the dominant influence of several financial ratios on stock returns. Financial ratios are helpful in evaluating relied returns. The quantitative research approach is used to analyze how financial ratios affect stock returns. The population of this study is companies in the food and beverage sector listed on the Indonesia Stock Exchange. The analysis was carried out from 2017 to 2020 using secondary data sources. Purposive sampling is used in this study, with the sample chosen based on predetermined standards and subjected to multiple linear regression analysis. The analysis' findings demonstrate that DER and TATO have no significant effect on stock returns, while CR, ROA, and ROE have a significant effect on stock returns. optimal corporate profitability is not always achieved by having too many current assets. Additionally, unproductive management of surplus and unused funds will impact declining stock returns. The results of this study indicate that idle current assets cannot generate company profitability because the current ratio is too high indicating an excess of current assets relative to fixed assets.

Suggested Citation

  • Dwijayani, Henny & Marzuki, Moh Idris & Sari, Linda Ratna & Muchtar, Muchtar & Aslichah, Aslichah, 2023. "Financial Ratios and Stock Return in the Food and Beverage Company," EkBis: Jurnal Ekonomi dan Bisnis, UIN Sunan Kalijaga Yogyakarta, vol. 7(1), pages 23-33, June.
    • Handle: RePEc:ris:ekbisj:1763
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    More about this item

    Keywords

    Profitability; Financial Ratio; Stock Returns;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East

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