The Effect Of Prediction of Financial Difficulties And Financial Performance On Stock Returns

Feryadi Rahnaen (Department Accounting, Mataram University, Indonesia)
Siti Atikah (Department Accounting, Mataram University, Indonesia)
Robith Hudaya (Department Accounting, Mataram University, Indonesia)

International Journal of Business and Quality Research
Vol. 2 No. 01 (2024): January - March, International Journal of Business and Quality Research (IJBQR

This research aims to analyze the effect of predicted financial difficulties (Altman z-score) and financial performance (Current ratio, Debt to Equity Ratio, and Return On Assets) on stock returns. In this research, the author used an associative research method with a quantitative approach with the data source used being secondary data and sampling using purposive sampling. The sample of this research is 33 manufacturing companies in various industrial sub-sectors listed on the Indonesia Stock Exchange from 2017 - 2021. Data analysis was done using the panel data regression method and using the Eviews 10 application. This research provides results that the Altman z-score value has a negative and insignificant influence on stock returns. The liquidity (CR) and leverage (DER) variables have a positive and insignificant influence on stock returns, and the profitability ratio (ROA) variable has a positive and insignificant influence on stock returns. The findings in this research investors can maximize investment returns and minimize investment risks.