THE EFFECT OF RETURN ON ASSET (ROA), RETURN ON EQUITY (ROE), AND NET PROFIT MARGIN (NPM) ON STOCK PRICE ON FOOD AND BEVERAGES COMPANIES LISTED IN INDONESIA STOCK EXCHANGE (IDX)
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Date
2014-11-06
Journal Title
Journal ISSN
Volume Title
Publisher
The Third International Conference on Entrepreneurship and Business Management, Universitas Tarumanagara, Universiti Sains Malaysia
Abstract
The stock price is the price formed from the interaction of buyers and sellers of shares that
motivated by corporate profits expectations. In capital market activity, the stock price is a
very important factor and must be considered by investors in implementing the investment,
because the stock price indicates the company value. Shares in the stock price are determined
by market forces, which mean the stock price is determined by forces of demand and supply.
Since the global crisis that occurred in mid-2008, only the food and beverage industry can
survive, demand in this sector remains high. Food and beverage companies have the largest
contribution to the Stock Exchange by 43% compared with others. The purpose of this
research is to analyze the effect of Return on Assets (ROA), Return on Equity (ROE) and Net
Profit Margin (NPM) of the stock price and also to determine which among these variables—
ROA, ROE, and NPM—has the strongest effect on stock price on food and beverages
companies listed in Indonesia Stock Exchange (IDX). The methods used in this research are
descriptive and verificative. The data is analyzed with multiple linear regressions on 9
companies, which are all the Food and Beverage companies listed in Indonesia Stock
Exchange from 2008 to 2013. The research shows that there is a significant effect on food
and beverages companies listed in Indonesia Stock Exchange (IDX) and the most dominant
variable that effect is Net Profit Margin (NPM).
Description
Keywords
ROA, ROE, NPM, Stock Price, Food and Beverages companies