Investigating the effect of other variables

Oct 13, 2025 by windailys.com 72 views

Analysis of the Effect of Profitability and Stock Prices on the Volume of Shares Sales in Manufacturing Companies Listed on the Indonesia Stock Exchange

Introduction

The Indonesia Stock Exchange (IDX) is one of the largest stock exchanges in Southeast Asia, with a vast array of companies listed across various sectors. Among these, manufacturing companies play a significant role in driving economic growth and development. However, the performance of these companies is not only influenced by their internal factors but also by external market dynamics. In this study, we aim to investigate the effect of profitability and stock prices on the volume of shares sales in manufacturing companies listed on the IDX.

Research Purposes

The primary objective of this study is to examine the relationship between the level of profitability, measured through Return on Assets (ROA), Return on Equity (ROE), and Net Profit Margin (NPM), and stock prices on the volume of shares sales of manufacturing companies listed on the IDX. This study utilizes an associative causal approach, leveraging secondary data from 25 manufacturing companies registered on the IDX from 2009 to 2011.

Methodology

To achieve the research objectives, we conducted a series of classic assumption tests, including normality tests, multicollinearity tests, heteroscedasticity tests, and autocorrelation tests. Additionally, descriptive analysis methods, linear regression, and hypothesis tests such as the F and T tests were applied to test the relationship between variables.

Research Results

The results of this study indicate that simultaneously, the ROA, ROE, NPM, and stock prices have a significant influence on the sales volume of shares of manufacturing companies listed on the IDX. However, when viewed partially, the ROA, NPM, and stock prices show a significant effect on the volume of stock sales. In contrast, ROE has no significant influence on the volume of shares sales.

Additional Analysis and Explanation

The findings of this study suggest that the profitability measured through ROA and NPM play a crucial role in increasing the attractiveness of a company in the eyes of investors. High ROA indicates that companies are able to generate better profits relative to the total assets they have, while high NPMs reflect the efficiency of the company in managing costs and generating profits from sales.

On the other hand, stock prices also function as an indicator of market confidence in company performance. When stock prices increase, usually accompanied by an increase in the volume of stock sales, showing high investor interest. However, the results showing that ROE did not have a significant effect might reflect that investors considered other aspects of their assessment, such as market conditions or the overall financial performance of the company.

Conclusion

This study confirms the importance of understanding the effect of profitability and stock prices in the context of investment in the stock market, especially for manufacturing companies in Indonesia. Investors are advised to consider profitability indicators when conducting stock analysis, because these factors greatly influence investment decisions and can have an impact on their portfolio performance.

In dealing with changing market dynamics, a deep understanding of the influence of these variables will help investors in making more appropriate and strategic decisions. By considering the relationship between profitability, stock prices, and the volume of shares sales, investors can make more informed decisions and achieve better investment outcomes.

Recommendations

Based on the findings of this study, we recommend that investors and stakeholders in the capital market consider the following:

Profitability indicators: Investors should consider profitability indicators such as ROA, NPM, and ROE when conducting stock analysis.
Stock prices: Stock prices can serve as an indicator of market confidence in company performance. Investors should monitor stock prices and adjust their investment strategies accordingly.
Market conditions: Investors should consider market conditions and overall financial performance of the company when making investment decisions.
Strategic decision-making: Investors should make strategic decisions based on a deep understanding of the influence of profitability and stock prices on the volume of shares sales.

By considering these recommendations, investors can make more informed decisions and achieve better investment outcomes in the stock market.

Limitations of the Study

This study has several limitations, including:

Sample size: The sample size of 25 manufacturing companies may not be representative of the entire population of manufacturing companies listed on the IDX.
Time period: The study only considered data from 2009 to 2011, which may not reflect the current market dynamics.
Methodology: The study used a linear regression approach, which may not capture the complex relationships between variables.

Future studies should aim to address these limitations and provide a more comprehensive understanding of the effect of profitability and stock prices on the volume of shares sales in manufacturing companies listed on the IDX.

Future Research Directions

Based on the findings of this study, several future research directions can be identified, including:

Investigating the effect of other variables: Future studies can investigate the effect of other variables, such as market conditions, company size, and industry, on the volume of shares sales.
Using alternative methodologies: Future studies can use alternative methodologies, such as machine learning or panel data analysis, to capture the complex relationships between variables.
Examining the impact of regulatory changes: Future studies can examine the impact of regulatory changes on the volume of shares sales and the relationship between profitability and stock prices.

By addressing these research directions, future studies can provide a more comprehensive understanding of the effect of profitability and stock prices on the volume of shares sales in manufacturing companies listed on the IDX.
Frequently Asked Questions (FAQs) on the Effect of Profitability and Stock Prices on the Volume of Shares Sales in Manufacturing Companies Listed on the Indonesia Stock Exchange

Q: What is the main objective of this study?

A: The main objective of this study is to examine the relationship between the level of profitability, measured through Return on Assets (ROA), Return on Equity (ROE), and Net Profit Margin (NPM), and stock prices on the volume of shares sales of manufacturing companies listed on the Indonesia Stock Exchange (IDX).

Q: What is the significance of this study?

A: This study is significant because it provides insights into the factors that influence the volume of shares sales in manufacturing companies listed on the IDX. Understanding these factors can help investors and stakeholders in the capital market make more informed decisions and achieve better investment outcomes.

Q: What are the key findings of this study?

A: The key findings of this study are:

Simultaneously, ROA, ROE, NPM, and stock prices have a significant influence on the sales volume of shares of manufacturing companies listed on the IDX.
Partially, ROA, NPM, and stock prices show a significant effect on the volume of stock sales.
ROE has no significant influence on the volume of shares sales.

Q: What are the implications of this study?

A: The implications of this study are:

Investors should consider profitability indicators such as ROA, NPM, and ROE when conducting stock analysis.
Stock prices can serve as an indicator of market confidence in company performance.
Investors should consider market conditions and overall financial performance of the company when making investment decisions.

Q: What are the limitations of this study?

A: The limitations of this study are:

The sample size of 25 manufacturing companies may not be representative of the entire population of manufacturing companies listed on the IDX.
The study only considered data from 2009 to 2011, which may not reflect the current market dynamics.
The study used a linear regression approach, which may not capture the complex relationships between variables.

Q: What are the future research directions?

A: The future research directions are:

Investigating the effect of other variables, such as market conditions, company size, and industry, on the volume of shares sales.
Using alternative methodologies, such as machine learning or panel data analysis, to capture the complex relationships between variables.
Examining the impact of regulatory changes on the volume of shares sales and the relationship between profitability and stock prices.

Q: What are the practical implications of this study for investors and stakeholders in the capital market?

A: The practical implications of this study for investors and stakeholders in the capital market are:

Investors should consider profitability indicators when conducting stock analysis.
Investors should monitor stock prices and adjust their investment strategies accordingly.
Investors should consider market conditions and overall financial performance of the company when making investment decisions.

Q: What are the future implications of this study for the capital market?

A: The future implications of this study for the capital market are:

The study provides insights into the factors that influence the volume of shares sales in manufacturing companies listed on the IDX.
The study can help investors and stakeholders in the capital market make more informed decisions and achieve better investment outcomes.
The study can contribute to the development of more effective investment strategies and risk management techniques.

Q: What are the potential applications of this study?

A: The potential applications of this study are:

The study can be used to develop more effective investment strategies and risk management techniques.
The study can be used to provide insights into the factors that influence the volume of shares sales in manufacturing companies listed on the IDX.
The study can be used to contribute to the development of more effective capital market regulations and policies.