Analysis Of The Effect Of Accounting Profit Information And Cash Flow Report On Stock Prices In The Banking Industry Listed On The IDX In 2008-2011

Feb 27, 2025 by ADMIN 148 views

Analysis of the Effect of Accounting Profit Information and Cash Flow Report on Stock Prices in the Banking Industry Listed on the IDX in 2008-2011

In the ever-evolving world of finance, a company's share price is often influenced by various factors, one of which is the financial performance reflected in the accounting and cash flow statements. This study aims to analyze the effect of accounting profit information and cash flow statements on the share price of banking companies listed on the Indonesia Stock Exchange (IDX) in the period 2008 to 2011.

Research Background

This research is classified as a causal research which also replicates previous research. The research population are banking companies listed on the IDX during the period studied. The data used in this study are the financial statements of each company, published through the website www.idx.co.id and the company's financial data obtained from the Indonesian Capital Market Directory (ICMD). The analysis method applied is a quantitative method with multiple regression. The sampling method used is purposive sampling, where of 33 companies, 11 companies were chosen as research samples.

The banking industry is a crucial sector in any economy, providing essential financial services to individuals and businesses. The performance of banking companies can have a significant impact on the overall economy, making it essential to understand the factors that influence their share prices. This study aims to contribute to the existing body of knowledge by analyzing the effect of accounting profit information and cash flow statements on the share price of banking companies listed on the IDX.

Research Variable

In this study, there were several variables analyzed:

Accounting Profit (variable x1): This variable represents the net income of a company, which is a key indicator of its financial performance.
Cash flow from operating activities (variable x2): This variable represents the cash generated from a company's core business activities, such as sales and production.
Cash flow from investment activities (variable x3): This variable represents the cash generated from a company's investment activities, such as buying and selling assets.
Cash flow from funding activities (variable x4): This variable represents the cash generated from a company's funding activities, such as borrowing and lending.
Stock price (variable y): This variable represents the price at which a company's shares are traded on the stock market.

Research Result

The results of this study indicate that simultaneously, all independent variables have a significant effect on stock prices. However, when it was tested partially, only accounting profits showed a significant effect on stock prices. Meanwhile, cash flow from operations, investment, and funding activities does not have a significant effect on stock prices.

The findings of this study suggest that accounting profits are a crucial factor in determining the share price of banking companies listed on the IDX. This is consistent with previous studies that have found a positive relationship between accounting profits and stock prices.

Additional Analysis and Explanation

Why does accounting profit become the only variable that significantly affects stock prices? One possibility is that investors and markets tend to pay more attention to accounting profits as an indicator of a company's performance. Reported profits reflect how well the company manages its income and can provide a positive signal for potential investors about the potential of future profits.

On the other hand, the statement of cash flow, although it is important, may not be seen as the market for the market by the market. This can occur because cash flows are often influenced by external factors such as economic fluctuations or changes in government policy, which can make investors doubt.

In addition, limitations in investors' understanding of cash flow statements can also be a factor. Many investors may be more familiar with net profit, while the details in the cash flow statement require a deeper understanding of the company's operational and investment activities.

Conclusion

This study emphasizes the importance of accounting profit information in determining the share price of banking companies listed on the IDX during the 2008-2011 period. While the cash flow statement is also important, its effect on stock prices seems more limited. Therefore, for investors and other stakeholders, understanding and analyzing accounting profits in depth can be a strategic step in making investment decisions in the banking sector.

With the right analysis, it is hoped that investors can utilize accounting earnings and cash flow information to achieve optimal profits in their investment. This study contributes to the existing body of knowledge by providing insights into the factors that influence the share price of banking companies listed on the IDX.

Recommendations for Future Research

This study has several limitations, including the use of a limited sample size and the focus on a specific period. Future research could build on this study by:

Using a larger sample size to increase the generalizability of the findings.
Analyzing the effect of accounting profit information and cash flow statements on the share price of banking companies listed on the IDX during a different period.
Examining the effect of other factors, such as market conditions and economic indicators, on the share price of banking companies listed on the IDX.

By addressing these limitations, future research can provide a more comprehensive understanding of the factors that influence the share price of banking companies listed on the IDX.

Implications for Practice

The findings of this study have several implications for practice:

Investors and other stakeholders should pay close attention to accounting profit information when making investment decisions in the banking sector.
Companies listed on the IDX should prioritize transparency and accuracy in their financial reporting, including the presentation of accounting profits and cash flow statements.
Regulators and policymakers should consider the importance of accounting profit information and cash flow statements in determining the share price of banking companies listed on the IDX.

By understanding the factors that influence the share price of banking companies listed on the IDX, investors, companies, and regulators can make more informed decisions and contribute to the stability and growth of the financial system.
Q&A: Analysis of the Effect of Accounting Profit Information and Cash Flow Report on Stock Prices in the Banking Industry Listed on the IDX in 2008-2011

In our previous article, we discussed the findings of a study that analyzed the effect of accounting profit information and cash flow statements on the share price of banking companies listed on the Indonesia Stock Exchange (IDX) in the period 2008 to 2011. In this article, we will answer some of the most frequently asked questions about the study and its findings.

Q: What was the main objective of the study?

A: The main objective of the study was to analyze the effect of accounting profit information and cash flow statements on the share price of banking companies listed on the IDX in the period 2008 to 2011.

Q: What were the research variables used in the study?

A: The research variables used in the study were:

Accounting Profit (variable x1): This variable represents the net income of a company, which is a key indicator of its financial performance.
Cash flow from operating activities (variable x2): This variable represents the cash generated from a company's core business activities, such as sales and production.
Cash flow from investment activities (variable x3): This variable represents the cash generated from a company's investment activities, such as buying and selling assets.
Cash flow from funding activities (variable x4): This variable represents the cash generated from a company's funding activities, such as borrowing and lending.
Stock price (variable y): This variable represents the price at which a company's shares are traded on the stock market.

Q: What were the findings of the study?

A: The findings of the study indicate that simultaneously, all independent variables have a significant effect on stock prices. However, when it was tested partially, only accounting profits showed a significant effect on stock prices. Meanwhile, cash flow from operations, investment, and funding activities does not have a significant effect on stock prices.

Q: Why did accounting profit become the only variable that significantly affects stock prices?

A: One possibility is that investors and markets tend to pay more attention to accounting profits as an indicator of a company's performance. Reported profits reflect how well the company manages its income and can provide a positive signal for potential investors about the potential of future profits.

Q: What are the implications of the study for investors and other stakeholders?

A: The findings of the study suggest that investors and other stakeholders should pay close attention to accounting profit information when making investment decisions in the banking sector. Companies listed on the IDX should prioritize transparency and accuracy in their financial reporting, including the presentation of accounting profits and cash flow statements.

Q: What are the limitations of the study?

A: The study has several limitations, including the use of a limited sample size and the focus on a specific period. Future research could build on this study by using a larger sample size and analyzing the effect of accounting profit information and cash flow statements on the share price of banking companies listed on the IDX during a different period.

Q: What are the recommendations for future research?

A: Future research could build on this study by:

Using a larger sample size to increase the generalizability of the findings.
Analyzing the effect of accounting profit information and cash flow statements on the share price of banking companies listed on the IDX during a different period.
Examining the effect of other factors, such as market conditions and economic indicators, on the share price of banking companies listed on the IDX.

Q: What are the implications of the study for regulators and policymakers?

A: The findings of the study suggest that regulators and policymakers should consider the importance of accounting profit information and cash flow statements in determining the share price of banking companies listed on the IDX. They should prioritize transparency and accuracy in financial reporting and consider the potential impact of accounting profit information and cash flow statements on the share price of banking companies listed on the IDX.