The Impact Of Financial Ratios On Stock Returns: A Study Of Companies In The Sri-kehati Index 2014-2022
Abstract
This study aims to identify how much influence Return On Asset (ROA), Debt to Equity Ratio (DER), Current Ratio (CR), and Earning Per Share (EPS) have on Stock Returns. The population focused on in this study are companies listed in the SRI-Kehati Index during the period 2014-2022, with a span of the last 9 years. The sample selection method used is purposive sampling, where 10 companies were carefully selected as research samples. Data analysis was carried out using panel data regression with a significance level of 0.05, and utilizing STATA software to support the analysis process. The results showed that the variables Return On Asset (ROA) and Earning Per Share (EPS) have a positive and significant influence on Stock Returns. This shows that the rate of return on assets (ROA) and earnings per share (EPS) contribute substantially to a company's stock performance. The higher the ROA and EPS, the more likely it is that stock returns will also increase. The results of the study also show that the Current Ratio (CR) and Debt to Equity Ratio (DER) variables do not have a significant effect on Stock Returns. This raises questions about the relevance of the two ratios in predicting stock performance. This finding may be a consideration for investors and decision makers in analyzing the factors that affect a company's stock performance.References
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Zhang, Yanying et al. (2021) ‘Shifts in abundance and network complexity of coral bacteria in response to elevated ammonium stress’, Science of The Total Environment, 768, p. 144631.
Ahmed, F. et al. (2024) ‘Corporate capital structure effects on corporate performance pursuing a strategy of innovation in manufacturing companies’, Heliyon, 10(3).
Ahmed, R., Hudson, R. and Gregoriou, A. (2023) ‘The implications of liquidity ratios: Evidence from Pakistan stock exchange limited’, The Quarterly Review of Economics and Finance, 87, pp. 235–243.
Alaaraja, H.K. et al. (2024) ‘26 Impact of Current and Leverage Ratio Towards the Financial Performance of Iraqi Listed Banks’, in Sustainable Innovations in Management in the Digital Transformation Era: Proceedings of the International Conference on Sustainable Innovations in Management in The Digital Transformation Era (SIMDTE 2023), Bahrain. Taylor & Francis, p. 262.
Amin, H.I.M. and Cek, K. (2023) ‘The effect of golden ratio-based capital structure on firm’s financial performance’, Sustainability, 15(9), p. 7424.
Awaludin, D.T., Hasanudin, H. and Alfitriani, Y. (2023) ‘Pengaruh Kualitas Pelayanan, Teknologi Informasi & Kemudahan Pengguna Dengan Terhadap Pelaporan Pajak E-Filing’, Jurnal Rekayasa Informasi, 12(2), pp. 107–117.
Bertsatos, G. and Sakellaris, P. (2016) ‘A dynamic model of bank valuation’, Economics Letters, 145, pp. 15–18.
Bunea, O.-I., Corbos, R.-A. and Popescu, R.-I. (2019) ‘Influence of some financial indicators on return on equity ratio in the Romanian energy sector-A competitive approach using a DuPont-based analysis’, Energy, 189, p. 116251.
Chakri, P., Pratap, S. and Gouda, S.K. (2023) ‘An exploratory data analysis approach for analyzing financial accounting data using machine learning’, Decision Analytics Journal, 7, p. 100212.
Chen, W.-S. and Du, Y.-K. (2009) ‘Using neural networks and data mining techniques for the financial distress prediction model’, Expert systems with applications, 36(2), pp. 4075–4086.
Chen, Y. et al. (2023) ‘Financial market opening and corporate tax avoidance: Evidence from staggered quasi-natural experiments’, Finance Research Letters, 54, p. 103770.
Erol, S. (2023) ‘Assessing the impact of the Covid-19 pandemic on the financial and economic structure performance of Turkish sea freight transport sector’, Regional Studies in Marine Science, 57, p. 102749.
Fakoya, M.B. (2020) ‘Investment in hazardous solid waste reduction and financial performance of selected companies listed in the Johannesburg Stock Exchange Socially Responsible Investment Index’, Sustainable Production and Consumption, 23, pp. 21–29.
Hasanudin, H. (2023a) ‘Exploring the Interplay of Investment Knowledge, Motivation, Minimum Capital, and Risk Perception in Shaping Students’ Interest in Capital Markets’, Jurnal Manajemen dan Kewirausahaan, 11(2), pp. 162–170.
Hasanudin, H. (2023b) ‘The Effect Of Price Earning Ratio (Per), Price To Book Value (Pbv) And Debt To Equity Ratio On Stock Return With Earnings Per Share (Eps) As A Moderation Variable: Studies On Insurance Sub-Sector Companies And Securities Companies Registered On The Indone’, CEMJP, 31(2), pp. 358–371.
Hasanudin, H. and Pratama, A.Y. (2023) ‘The Effect of Talent Management, Internal Communication and Work Life Balance on Employee Performance Through Employee Satisfaction at PT. Aru Raharja’, JMKSP (Jurnal Manajemen, Kepemimpinan, dan Supervisi Pendidikan), 8(1), pp. 587–606.
Hong, S.-J. et al. (2023) ‘Exploring the impact of working capital in the US aviation industry for profitability and shareholder value’, Transport Policy, 144, pp. 90–101.
Huang, L. et al. (2023) ‘An electrochemical biosensor for the highly sensitive detection of Staphylococcus aureus based on SRCA-CRISPR/Cas12a’, Talanta, 252, p. 123821.
Lestari, L.P. and Taswan, T. (2023) ‘The Effect Of Return On Assets And Price Book Value On Investment Opportunity Sets And Their Consequences On Leverage And Equity (Study on Manufacturing Companies Listed on the IDX for the 2019-2021 Period)’, Jurnal Ekonomi, 12(02), pp. 1510–1516.
Luoma, G.A. and Spiller Jr, E.A. (2002) ‘Financial accounting return on investment and financial leverage’, Journal of accounting education, 20(2), pp. 131–138.
Mioduchowska-Jaroszewicz, E. (2023) ‘Investment decisions based on the financial performance of related parties’, Procedia Computer Science, 225, pp. 3313–3321.
Szafraniec-Siluta, E. et al. (2023) ‘Application of factor analysis to reduce the dimensionality of the determinants of equity capital return on European Union farms’, Procedia Computer Science, 225, pp. 4433–4442.
Tayeb, N.F.M., Nurhayati, N. and Syafri, S. (2023) ‘Pengaruh Roa, Der, Ukuran Perusahaan Terhadap Nilai Perusahaan Asuransi Yang Terdaftar Di Bei Pada Tahun 2017-2022’, Neraca: Jurnal Ekonomi, Manajemen dan Akuntansi, 1(5), pp. 127–141.
Toochaei, M.R. and Moeini, F. (2023) ‘Evaluating the performance of ensemble classifiers in stock returns prediction using effective features’, Expert Systems with Applications, 213, p. 119186.
Usmonov, B. (2022) ‘The impact of the financial ratios on the financial performance. A case of Chevron Corporation (CVX)’, in International Conference on Next Generation Wired/Wireless Networking. Springer, pp. 333–344.
Wu, Y. et al. (2023) ‘Wetland mitigation functions on hydrological droughts: From drought characteristics to propagation of meteorological droughts to hydrological droughts’, Journal of Hydrology, 617, p. 128971.
Zhang, T., Xu, Z. and Li, J. (2023) ‘The asset pricing implications of global oil price uncertainty: Evidence from the cross-section of Chinese stock returns’, Energy, 285, p. 129407.
Zhang, Yanying et al. (2021) ‘Shifts in abundance and network complexity of coral bacteria in response to elevated ammonium stress’, Science of The Total Environment, 768, p. 144631.
Published
2025-06-05
How to Cite
Hasanudin, H. (2025). The Impact Of Financial Ratios On Stock Returns: A Study Of Companies In The Sri-kehati Index 2014-2022. Kontigensi : Jurnal Ilmiah Manajemen, 13(1), 112-124. https://doi.org/10.56457/jimk.v13i1.767
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Articles
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