Operational Cost Efficiency and Profitability Effects on Companies Distribution Stock Prices During Covid-19

Abstract

Abstract. This study was conducted to determine whether the efficiency of operating costs and profitability of companies listed on the Indonesia Stock Exchange in the banking sector on stock prices. Research design, data, and methodology: This study uses 35 banking companies from 2020 to 2021 as a sample in the study, with a total of 70 financial statements data. The analysis test was conducted to see the effect of operational cost efficiency and profitability on stock prices in banking companies during the covid-19 pandemic. Multiple linier regression is conducted to check the simultaneous test and partial test. As for the indicators in cost efficiencies are operating expenses on operating income. The profitability effects indicators are based on return on equity. Stock prices indicators are based on internal and external policies and abilities. The test results show that operational cost efficiency and profitability have a simultaneous effect on stock prices. However, it partially shows that operational cost efficiency has no significant effect. Meanwhile, profitability shows positive results and has a significant effect. Conclusions: Based on the table of the Coefficient of Determination (R²) test, the value of Adjusted R Square is 98.7%. This shows that the variables of Operational Cost Efficiency and Profitability affect the stock price by 98.7% and the remaining 1.3% is influenced by other variables. Practical perspectives are further discussed in the paper. Keywords: Operation cost efficiency, profitability effects, stock prices, multiple linier regression, banking sector