Effect of Profitability Financial, Ratios Return on Assets, Return on Equity, Gross Profit Margin and Inflation Level of Stock Return Manufacturing Company Recorded Activities in LQ 45

Abstract

This study aims to analyze the effect of financial performance on stock returns on manufacturing companies listed on the Indonesia Stock Exchange in the period of 2013 until 2017. The independent variable used in this study is financial performance. The financial performance referred to here is the financial performance measured by using the Return On Assets (ROA), Return On Equity (ROE), Gross Profit Margin (GPM), and Inflation Rate while the dependent variable is Stock Return. The sample in this study consisted of 13 manufacturing companies in the consumer goods sector which were listed on the Indonesia Stock Exchange (IDX) in the 2013 study period to 2017 is chosen based on certain criteria by using purposive sampling method. Analysis of the data used in this study is multiple linear regression analysis (t test and f test) which is processed with Eviews 9. From the multiple regression model used in this study, the results of partial testing (t test) showed that only three variables namely ROE, GPM and Inflation Rate had a significant positive effect on stock returns, while ROA had no significant effect on stock returns. While simultaneously (test f) shows that ROA, ROE, GPM, and the level of inflation together affect the stock return.

Keywords: Financial performance, Return On Assets (ROA), Return On Equity (ROE) and Gross Profit Margin (GPM), Inflation Rate, Stock Return

DOI: 10.7176/RJFA/12-24-05

Publication date: December 31^st 2021