THE INFLUENCE OF FINANCIAL RATIO TOWARDS STOCK PRICE

Abstract

The economic atmosphere around the world, including Indonesia makes the growth of investment meets its rapid development. The development indicates the growth and inclination of companies selling their stock to society or investor called go public company. The purpose of selling stock is to increase both of the domestic and foreign investors, company value, stock price, to expand market, product diversification, and to win the competition that can increase the income of a company.

The research purpose is to test the influence of CR, DER, ROA, ROE, and GPM toward stock price to companies which are listed in LQ-45 at Indonesia Stock Exchange in the period of 2009-2011. This research applies purposive sampling technique with 19 samples of companies. Multiple regressions are technical analysis method applied.

The result of t test indicates that CR, ROE, and GPM negatively and significantly influence dependent variable, which is stock price. DER and ROA positively and significantly influence stock price. Actually, there are some classical assumption tests, such as normality test, multicollinearity test, homoscedasticity test, and autocorrelation test.

Key Words : Stock’s Price, ROA, ROE, CR, DER, GPM, LQ45, Analysis Financial Ratio