Analysis Of The Effects Of ROA, NPM, And DER On Stock Returns In Manufacturing Companies Listed On The Indonesia Stock Exchange Period 2009 - 2011

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Analysis of the Effects of ROA, NPM, and DER on Stock Returns in Manufacturing Companies Listed on the Indonesia Stock Exchange for the Period 2009-2011

Introduction

The Indonesia Stock Exchange (IDX) is one of the largest stock exchanges in Southeast Asia, with a wide range of companies listed across various sectors. Among these sectors, the manufacturing industry plays a significant role in the country's economy. However, the performance of manufacturing companies listed on the IDX can be influenced by various factors, including their financial performance. This study aims to analyze the effects of Return on Assets (ROA), Net Profit Margin (NPM), and Debt to Equity Ratio (DER) on stock returns in manufacturing companies listed on the IDX during the period 2009 to 2011.

Methodology

The selection of samples for this study was carried out using the Purposive Sampling method based on three criteria: (1) the company must be registered on the IDX in the specified period, (2) there are financial statements for the same year, and (3) no value is lost in the data used. The analysis model applied in this study includes multiple linear regression, t-test, and F-test. The t-test aims to determine the effect of each independent variable on the dependent variable partially, while the F-test is used to test the simultaneous effect of all independent variables on the dependent variable.

Results

The results of the study show that both partially and simultaneously, ROA, NPM, and DER have no significant influence on the stock returns of the manufacturing company under study. This finding suggests that investors may need to consider other factors that are not covered in this study when making investment decisions. Although ROA, NPM, and DER are financial indicators commonly used to assess company performance, there are many other external and internal factors that can affect stock performance.

Additional Analysis and Explanation

The results showing that ROA, NPM, and DER have no significant effect on stock returns can have several important implications. First, this shows that investors may need to consider other factors that are not covered in this study when making investment decisions. Although ROA, NPM, and DER are financial indicators commonly used to assess company performance, there are many other external and internal factors that can affect stock performance.

Second, these results also reflect that manufacturing companies listed on the IDX during that period may have more complex challenges that cannot be explained just by looking at these financial indicators. For example, macroeconomic factors such as inflation, government policies, and global market conditions can have a greater influence on stock returns compared to the company's internal financial performance.

Third, it is important for investors and analysts to understand that stock performance is not always in line with the financial performance seen in the report. This indicates the need for diversification in investment analysis by taking into account other factors such as industrial news, market trends, and investor sentiment.

Conclusion

Overall, although this research provides useful insights about the influence of ROA, NPM, and DER, further research is needed to identify other factors that may be more influential on stock returns in the Indonesian manufacturing sector. Thus, the results of this study can be a foothold for further research that wants to dig deeper about the dynamics of the stock market in Indonesia.

Recommendations

Based on the findings of this study, the following recommendations can be made:

  1. Investors should consider other factors that are not covered in this study when making investment decisions.
  2. Manufacturing companies listed on the IDX should focus on improving their internal financial performance, such as ROA, NPM, and DER, to enhance their stock returns.
  3. Investors and analysts should diversify their investment analysis by taking into account other factors such as industrial news, market trends, and investor sentiment.

Limitations

This study has several limitations that should be noted. First, the sample size is limited to manufacturing companies listed on the IDX during the period 2009 to 2011. Second, the study only focuses on three financial indicators, namely ROA, NPM, and DER. Third, the study does not consider other external and internal factors that may affect stock returns.

Future Research Directions

Future research can build on the findings of this study by exploring other factors that may be more influential on stock returns in the Indonesian manufacturing sector. Some potential research directions include:

  1. Analyzing the impact of macroeconomic factors on stock returns in the Indonesian manufacturing sector.
  2. Examining the relationship between industrial news, market trends, and investor sentiment on stock returns in the Indonesian manufacturing sector.
  3. Investigating the effect of corporate governance on stock returns in the Indonesian manufacturing sector.

Conclusion

In conclusion, this study provides useful insights about the influence of ROA, NPM, and DER on stock returns in manufacturing companies listed on the IDX during the period 2009 to 2011. The findings suggest that investors should consider other factors that are not covered in this study when making investment decisions. Further research is needed to identify other factors that may be more influential on stock returns in the Indonesian manufacturing sector.
Frequently Asked Questions (FAQs) about the Analysis of the Effects of ROA, NPM, and DER on Stock Returns in Manufacturing Companies Listed on the Indonesia Stock Exchange for the Period 2009-2011

Q: What is the purpose of this study? A: The purpose of this study is to analyze the effects of Return on Assets (ROA), Net Profit Margin (NPM), and Debt to Equity Ratio (DER) on stock returns in manufacturing companies listed on the Indonesia Stock Exchange (IDX) during the period 2009 to 2011.

Q: What is the methodology used in this study? A: The selection of samples for this study was carried out using the Purposive Sampling method based on three criteria: (1) the company must be registered on the IDX in the specified period, (2) there are financial statements for the same year, and (3) no value is lost in the data used. The analysis model applied in this study includes multiple linear regression, t-test, and F-test.

Q: What are the results of this study? A: The results of the study show that both partially and simultaneously, ROA, NPM, and DER have no significant influence on the stock returns of the manufacturing company under study.

Q: What are the implications of the results of this study? A: The results showing that ROA, NPM, and DER have no significant effect on stock returns can have several important implications. First, this shows that investors may need to consider other factors that are not covered in this study when making investment decisions. Although ROA, NPM, and DER are financial indicators commonly used to assess company performance, there are many other external and internal factors that can affect stock performance.

Q: What are the limitations of this study? A: This study has several limitations that should be noted. First, the sample size is limited to manufacturing companies listed on the IDX during the period 2009 to 2011. Second, the study only focuses on three financial indicators, namely ROA, NPM, and DER. Third, the study does not consider other external and internal factors that may affect stock returns.

Q: What are the recommendations of this study? A: Based on the findings of this study, the following recommendations can be made:

  1. Investors should consider other factors that are not covered in this study when making investment decisions.
  2. Manufacturing companies listed on the IDX should focus on improving their internal financial performance, such as ROA, NPM, and DER, to enhance their stock returns.
  3. Investors and analysts should diversify their investment analysis by taking into account other factors such as industrial news, market trends, and investor sentiment.

Q: What are the future research directions of this study? A: Future research can build on the findings of this study by exploring other factors that may be more influential on stock returns in the Indonesian manufacturing sector. Some potential research directions include:

  1. Analyzing the impact of macroeconomic factors on stock returns in the Indonesian manufacturing sector.
  2. Examining the relationship between industrial news, market trends, and investor sentiment on stock returns in the Indonesian manufacturing sector.
  3. Investigating the effect of corporate governance on stock returns in the Indonesian manufacturing sector.

Q: What are the contributions of this study? A: This study contributes to the existing literature on the relationship between financial indicators and stock returns in the Indonesian manufacturing sector. The findings of this study provide insights into the factors that influence stock returns in this sector and highlight the need for investors and analysts to consider other factors beyond financial indicators when making investment decisions.

Q: What are the practical implications of this study? A: The practical implications of this study are that investors and analysts should consider other factors that are not covered in this study when making investment decisions. This includes considering macroeconomic factors, industrial news, market trends, and investor sentiment when evaluating the performance of manufacturing companies listed on the IDX.