iBuss Management
Vol 3, No 2 (2015): iBuss Management

The Effect of Financial Ratios toward Stock Returns among Indonesian Manufacturing Companies

Wijaya, James Andi (Unknown)



Article Info

Publish Date
28 Jul 2015

Abstract

Indonesian Composite Index (ICI) is the top gainer among major Asia-Pacific indices during 2008-2013. Inside the composite index, manufacturing index showed a stronger growth compared to the composite index.  Thus, this study  analyzes the influence of financial ratios toward stock returns in Indonesian manufacturing companies.  The data in this research are obtained using judgmental sampling method  consisting of 100 samples from  20 major listed Indonesian manufacturing companies during 2008-2013. Furthermore, the data were analyzed by using multiple linear regression analysis. The results showed that return on assets, debt to equity, dividend yield, earnings yield, and book to market simultaneously have a significant effect on stock returns. Partially, return on assets, dividend yield, earnings yield, and book to market have significant effects on stock returns. However, debt-to-equity ratio does not have partial significant effect  on stock returns.  Keywords: Financial Ratio, Stock Return, Profitability Ratio, Debt Ratio, Market Ratio.

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