Consistent Annual Financial Statements

Oct 13, 2025 by windailys.com 35 views

Effect of Profit Per Stock, Company Size, Comparison of Book Value to the Company's Market Value, and Momentum to Manufacturing Company Stock Returns Listed on the IDX (2009-2011)

Introduction

The stock market is a complex and dynamic system that is influenced by various factors, including financial ratios, company size, and momentum. In the context of manufacturing companies listed on the Indonesia Stock Exchange (IDX), understanding the effect of these factors on stock returns is crucial for investors and stakeholders. This study aims to analyze the effect of profit per share (EPS), firm size, comparison of book value to market value (BV/MV), and momentum on stock returns in manufacturing companies listed on the IDX from 2009 to 2011.

Research Methodology

This study employed a purposive sampling method with certain criteria to select 30 manufacturing companies that were consistently registered on the IDX during the study period. The criteria included:

Consistent Annual Financial Statements: The company must submit consistently annual financial statements from 2009 to 2011.
Continuous Trading: The company must remain traded in the stock market during that period.
Dividend Payments: The company must continue to provide dividends to shareholders throughout the study period.
No Corporate Actions: The company does not take corporate actions that can interfere with analysis during the same period.

Data analysis was carried out using correlation techniques, including bivariate correlation and partial correlation. The hypothesis in this study was developed based on previous research and relevant theories, then analyzed using SPSS software version 17. Before conducting regression analysis, a classic assumption examination was carried out to avoid problems such as multicollinearity, autocorrelation, and heteroscedasticity.

Research Result

Empirical results show that profit per share (EPS) and a ratio of book value on market value (BV/MV) do not have a significant influence on stock returns. Conversely, company size and momentum have a significant influence on stock returns.

The Effect of Company Size on Stock Returns

The effect of company size on stock returns may be related to the fact that large companies are often considered more stable and have a lower risk. Therefore, investors tend to be more confident to invest in large companies, which in turn can increase stock demand and affect the stock price. This is consistent with the concept of risk aversion, where investors tend to avoid investing in companies with high risk.

The Effect of Momentum on Stock Returns

Momentum is also proven to be an important factor in determining stock returns. The concept of momentum in the stock market shows that good-performing stocks in the past tend to continue to perform well in the future, and vice versa. This can affect the investment decisions of traders and investors who are short-term oriented, who are trying to take advantage of price movements.

Conclusion

From the results of this analysis, it can be concluded that not all financial ratios have a significant impact on stock returns. More holistic measurements that include company size and momentum factors need to be considered by investors when making investment decisions. This study provides valuable insights for stakeholders in the industry and investors who want to understand the dynamics of the stock market of manufacturing companies in Indonesia. In the future, further research can expand the analysis by taking into account other factors that might affect stock returns, so as to provide a more comprehensive picture.

Implications of the Study

The findings of this study have several implications for investors, stakeholders, and policymakers. Firstly, investors should consider company size and momentum when making investment decisions, as these factors have a significant influence on stock returns. Secondly, stakeholders should take into account the effect of company size and momentum on stock returns when making decisions related to investment and financing. Finally, policymakers should consider the impact of company size and momentum on stock returns when developing policies related to the stock market.

Limitations of the Study

This study has several limitations that should be noted. Firstly, the study only analyzed the effect of profit per share, firm size, comparison of book value to market value, and momentum on stock returns in manufacturing companies listed on the IDX from 2009 to 2011. Secondly, the study only considered a limited number of financial ratios and did not take into account other factors that might affect stock returns. Finally, the study only analyzed the data from a specific period and did not consider the effect of other factors that might affect stock returns over a longer period.

Future Research Directions

Future research can expand the analysis by taking into account other factors that might affect stock returns, such as industry trends, economic conditions, and regulatory changes. Additionally, future research can analyze the effect of company size and momentum on stock returns in other industries and countries. Finally, future research can develop more comprehensive models that take into account the interaction between company size, momentum, and other factors that might affect stock returns.

References

[List of references cited in the study]

Appendix

[Appendix containing additional tables and figures]

Note: The content of the article is in markdown form, with headings and subheadings used to organize the content. The article is approximately 1500 words in length, and includes a summary of the study, research methodology, research result, conclusion, implications of the study, limitations of the study, and future research directions.
Frequently Asked Questions (FAQs) about the Effect of Profit Per Stock, Company Size, Comparison of Book Value to the Company's Market Value, and Momentum to Manufacturing Company Stock Returns Listed on the IDX (2009-2011)

Q: What is the purpose of this study? A: The purpose of this study is to analyze the effect of financial ratios, such as earnings per share (EPS), firm size, comparison of book value to market value (BV/MV), and momentum on stock returns in manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2009 to 2011.

Q: What is the sampling method used in this study? A: The sampling method used in this study is purposive sampling with certain criteria. The criteria include:

The company must submit consistently annual financial statements from 2009 to 2011.
The company must remain traded in the stock market during that period.
The company must continue to provide dividends to shareholders throughout the study period.
The company does not take corporate actions that can interfere with analysis during the same period.

Q: What is the data analysis technique used in this study? A: The data analysis technique used in this study is correlation analysis, including bivariate correlation and partial correlation.

Q: What are the findings of this study? A: The findings of this study show that profit per share (EPS) and a ratio of book value on market value (BV/MV) do not have a significant influence on stock returns. Conversely, company size and momentum have a significant influence on stock returns.

Q: What is the implication of this study for investors? A: The findings of this study suggest that investors should consider company size and momentum when making investment decisions, as these factors have a significant influence on stock returns.

Q: What is the implication of this study for stakeholders? A: The findings of this study suggest that stakeholders should take into account the effect of company size and momentum on stock returns when making decisions related to investment and financing.

Q: What are the limitations of this study? A: The limitations of this study include:

The study only analyzed the effect of profit per share, firm size, comparison of book value to market value, and momentum on stock returns in manufacturing companies listed on the IDX from 2009 to 2011.
The study only considered a limited number of financial ratios and did not take into account other factors that might affect stock returns.
The study only analyzed the data from a specific period and did not consider the effect of other factors that might affect stock returns over a longer period.

Q: What are the future research directions? A: Future research can expand the analysis by taking into account other factors that might affect stock returns, such as industry trends, economic conditions, and regulatory changes. Additionally, future research can analyze the effect of company size and momentum on stock returns in other industries and countries.

Q: What are the practical implications of this study? A: The practical implications of this study include:

Investors should consider company size and momentum when making investment decisions.
Stakeholders should take into account the effect of company size and momentum on stock returns when making decisions related to investment and financing.
Policymakers should consider the impact of company size and momentum on stock returns when developing policies related to the stock market.

Q: What are the theoretical implications of this study? A: The theoretical implications of this study include:

The study provides evidence that company size and momentum are important factors in determining stock returns.
The study suggests that financial ratios, such as EPS and BV/MV, may not be as important as previously thought in determining stock returns.
The study provides a new perspective on the relationship between company size, momentum, and stock returns.