Research Paper
Year: 2019 | Month: July | Volume: 6 | Issue: 7 | Pages: 77-90
Analysis on Stock Return in Coal Mining Companies Listed in BEI (Indonesia Stock Exchange)
Vina Aulia Dina Damanik1, Dr. Isfenti Sadalia2, Dr. Amlys Syahputra Silalahi2
1Postgraduate Students Master of Management University of North Sumatera, Indonesia
2Postgraduate Lecturer Master of Management University of North Sumatera, Indonesia
Corresponding Author: Vina Aulia Dina Damanik
ABSTRACT
The objective of the research was to analyze stock return in coal mining companies listed in BEI (Indonesia Stock Exchange). A mining company needs a large sum of capital to exploit natural resources in developing its business. Therefore, it has to enter capital market to absorb investment to strengthen its financial position. Capital market plays an important role in the economy of a country since it has two functions: economic function and financial function. Investment in stock depends on the fluctuation of stock price in stock exchange, interest rate imbalance, market imbalance, and a company’s financial performance. Independent variables were current ratio, return on equity, net profit margin, and firm size. The data were quantitative data which were in figures. Secondary data were company’s financial statement, obtained from BEI official website: www.idx.co.id . The analysis of panel data regression model used common effect model which was a very simple panel data model approach since it combined time series data and cross section data in which time and individual dimension was ignored since it was assumed that the behavior of company’s data was similar in various time spans. The result of the research showed that the variable of current ratio had negative and insignificant influence on stock return, return on equity had positive and insignificant influence on stock return, net profit margin negative and insignificant influence on stock return, and firm size had negative and significant influence on stock return. Simultaneously, the variables of current ratio, return on equity, net profit margin, and firm size had significant influence on stock return. It is recommended that the company’s financial manager make a policy on increasing net profit margin to increase investors’ welfare so that they can make accurate decision in investment.
Key words: Stock Return, Current Ratio, Return on Equity, Net Profit Margin, Firm Size
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