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Determinants of Return On Assets And Its Implication On Stock Prices: Empirical Study at Health Sector Companies Listed On the IDX for the 2017–2021 Period
Abstract
The development of the Indonesian capital market is one of the supporters of economic progress, because the capital market is used as an alternative source of funding used by companies. The capital market also plays an important role in raising funds from those who want to invest in the capital market. Return On Assets can be said to be a measure of good performance and the ratio that the company can control the most, this ratio also represents all activities in the company and stockholders also measures the operational efficiency of the company through achieving profits by comparing the Return On Assets of a company with other similar companies which is a competitor of the company, indirectly Return On Assets plays an important role in a company. This study aims to determine the effect of Current Ratio, Total Asset TurnOver, Net Profit Margin, and Inflation on Return On Assets and the influence of Current Ratio, Total Asset TurnOver, Net Profit Margin, Inflation, and Return On Assets on Stock Prices in Health Sector companies that listed on the Indonesia Stock Exchange for the period 2017 – 2021, with a sample of 9 companies, both simultaneously and partially. This study used a quantitative method with panel data regression analysis using the Eviews 10 program. Based on data analysis conducted by panel data regression analysis, it partially shows that the variables Total Asset TurnOver and Net Profit Margin have a significant and significant effect on Return On Assets in Health sector companies for the period 2017 – 2021, while the Current Ratio and Inflation variables have no effect and are not significant on Return On Assets in Health sector companies for the period 2017 – 2021. Then the partial panel data regression analysis shows that only Total Asset Turnover has a significant effect on the Stock Price, while the Current Ratio, Net Profit Margin, Inflation, and Return On Assets have no effect and are not significant on the Stock Price. Simultaneously the variables Current Ratio, Total Asset TurnOver, Net Profit Margin, and Inflation have a significant effect on the Return On Assets of Health Sector Companies Listed on the Indonesia Stock Exchange for the 2017 – 2021 period. Then simultaneously the variables Current Ratio, Total Asset TurnOver, Net Profit Margin, Inflation, and Return On Assets have a significant effect on the Stock Prices of Health Sector Companies Listed on the Indonesia Stock Exchange for the 2017 – 2021 period.
Keywords—current ratio; total asset turnover; net profit margin; inflation; return on asset; stock price
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DOI: http://dx.doi.org/10.52155/ijpsat.v45.2.6396
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