Fundamental Analysis of Financial Ratios on Stock Prices

Abstract

This study is a follow-up study of research on stock prices that have been conducted by researchers, but this research focuses on the fundamental analysis of the impact of financial ratios before and after being published on stock prices. As in the signal theory that management will always try to give a positive signal to the market to be captured well so as to increase the value of the company which is reflected in the entity's stock price on the exchange, one of which is by publishing financial statements. This study analyzes more deeply the effect of financial ratios including Return On Assets (ROA), Net Profit Margin (NPM) and Debt to Equity Ratio (DER) on stock prices before and after the publication of financial statements. Using panel data with STATA, it was found that the effect of ROA and NPM on stock prices after publication was stronger than before publication, while the effect of DER was found to be the opposite. With these results concluded that financial ratios are still one of the benchmarks used by investors in their transactions in the stock market.