ANALYSIS OF DEBT TO EQUITY RATIO AND RETURN ON ASSETS AND ITS EFFECT TO CLOSING PRICE OF THE MINING INDUSTRY LISTED IN BEI

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ANALYSIS OF DEBT TO EQUITY RATIO AND RETURN ON ASSETS AND ITS EFFECT TO CLOSING PRICE OF THE MINING INDUSTRY LISTED IN BEI

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Title: ANALYSIS OF DEBT TO EQUITY RATIO AND RETURN ON ASSETS AND ITS EFFECT TO CLOSING PRICE OF THE MINING INDUSTRY LISTED IN BEI
Author: Riantani, Suskim; Hartaya, Tantra; Hasanah, Alfiah
Abstract: The impact of global financial crisis has lowered the financial performance some of mining industries in Indonesia. On the first quarter of 2009, some of them experienced 80% decreased in profit due to the decrease in price and sales of its product. The need for fresh capital to improve the financial performance has led these industries to restructure their sources of capital. One of the ways to obtain new capital is engaging in stock market. The combination of debt to equity ratio (DER) and return on asset (ROA) reflected on the price of stocks. The research analyzed and investigated the debt to equity ratio, return on asset and the effect of them on stock prices measured by the closing price. The investigations employed the regression method and test the result with the classical assumption test and using purposive sampling method to obtain the data of mining and mining service industries listed in Indonesia Stock Exchange (Bursa Efek Indonesia or BEI) for 2005-2009 period. The findings showed that the debt to equity ratio, return on assets and stock prices showed fluctuative moves. Both of the debt to equity ratio (DER) and return on asset (ROA) variables simultaneously showed a significant effect to the closing prices of the stocks of mining industries, but individually only return on asset has positive and significant effect to the closing prices of mining industries during the investigation.
URI: http://repository.widyatama.ac.id/xmlui/handle/123456789/3412
Date: 2011-06-22


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