AN ANALYSIS OF THE FINANCIAL PERFORMANCE EFFECT OF SHARIA COMPANIES ON STOCK PRICE CHANGES (A Case Study of Companies Listed on the Sharia Stock Listing) - Test Repository
AN ANALYSIS OF THE FINANCIAL
PERFORMANCE EFFECT OF SHARIA COMPANIES
ON STOCK PRICE CHANGES
(A Case Study of Companies Listed on the Sharia Stock Listing)
A GRADUATING PAPER
Submitted to obtain a degree
Sarjana Ekonomi Syariah (S.E.Sy)
BY :
YUDI SAPUTRA
213 11 004
FACULTY OF ECONOMICS AND ISLAMIC BUSINESS
UNDERGRADUATE PROGRAM OF ISLAMIC BANKING
STATE OF ISLAMIC INSTITUTE (IAIN)
MOTTO
“Memayu hayuning bawana, Ambrasta dur hangkara”
(Falsafah Jawa)
“Sebaik-baik manusia adalah yang paling
bermanfaat bagi orang lain
”(HR. Ahmad, Thabrani, Daruqutni. Dishahihkan Al Albani dalam
As-Silsilah As-Shahihah)
DEDICATION
With given thanks to Allah SWT for all the graces, hidayah, and inayah, which has given me
the opportunity, to keep up the day to gain useful knowledge. I dedicate this Graduating
Paper to:
“My Parents, Mr. Suripto and Mrs. Tumiyem, who had raised me with love, as well as
providing an opportunity to be useful
”“My sister, Anisa Rahmawati”
“My lovely, Ernita Sari”
“My representative lecturer Dr. Anton Bawono, M.Si.”
“My encouragement lecturer Mr. Alfred L, M.Si”
“My caring lecturer Mrs. Fetria Eka Yudiana, M.Si”
“All lecturer of IAIN Salatiga”
“ All staff of IAIN Salatiga”
“My friends in PS-S1”
“KSEI”
ACKNOWLEDGEMENT
Bismillaahirrahmaanirrahiim Praise to Allah S.W.T on grace and guidance so that I can finish this paper.Although I was still far from perfection, but I have sought and seeks to present the best in every process of this research. Sholawat and salam is always devoted to the master of the Prophet Muhammad SAW. As our role model to achieve happiness of the world and the hereafter, hopefully someday we can intercession in yaumul qiyamah.
I am very believe that my research would not be possible this will be done and resolved without the guidance of a supervisor, Head of Islamic Banking study program S1 IAIN Salatiga, the staff IAIN Salatiga and especially my parents. So if it were me convey my gratitude to:
1. What I love and respect, Mr. Suripto and Mrs. Tumiyem. I am feel lucky, being the son of yours. Where Mr. and Mrs., always graced my life with a smile, and every opportunity to become useful human. As well as my sister, Anisa Rahmawati hopefully one day you can also studying S1 in the best place, and be a useful person for Indonesia.
2. Dear Dr. Anton Bawono, M.Si. as Dean of the Faculty of Economics and Business Islam once my lecturer, who always devote attention and guidance with patience. As well as a sense of concern for me is very deep.
Makes me feel always be able to do something better. Thank you for my
ABSTRACT
Yudi Saputra NIM (213 11 004) An Analysis of the Financial Performance Effect of Sharia Companies on Stock Price Changes ( a Case Study of Companies Listed on the Sharia Stock Listing). Study Program : Islamic Banking (S1) Lecturer : Dr. Anton Bawono, M.Si.
Keywords: financial performance, stock prices This study entitled " An Analysis of the Financial Performance Effect of
Sharia Companies on Stock Price Changes ( a Case Study of Companies Listed on the Sharia Stock Listing) ". This study uses eight (8) the financial ratios are debt to equity ratio, current ratio, inventory turnover ratio, total asset turnover, net profit margin, return on equity, price earning ratio, and dividend yield. The above financial ratios have been considered representative of the five types of financial ratios, which are 5 types of financial ratios in question are leverage ratios, liquidity ratios, efficiency ratios, profitability ratios, and market value ratios.
This research is quantitative, type of probability sampling (randomized) and using random retrieval method (simple random sampling). Simple random retrieval method is a method used to select the sample of the population in such a way so that every member of the population has an equal chance to be taken as a sample (Sugiarto, et al. 2001: 46). Secondary data used in this study is the financial information in the form of financial statements (annual report) issued by the Indonesian Stock Exchange (IDX). The data obtained is ICMD (Indonesian Capital Market Directory) were then carried filtering to separate conventional and sharia companies. Sharia companies selected based on Sharia Securities List, issued by the Commissioner of the Financial Services Authority.
The independent variables are TAT, PER, NPM, and DY effect on stock price changes either partially or jointly (simultaneously). Proven through statistical test (t test and F) as well as classical assumption (normality test, multicolinearity testtest, and autocorrelation test). Total Asset Turnover is the most influential variables to changes in stock prices simultaneously. Test proved through Multiple Regression with TAT, NPM, PER, and DY as independent variables. TAT coefficient b value of 0.698. Financial performance of companies listed on the List of Sharia Securities have a value in the low and medium categories. Wherein TAT and PER in the category of medium, while NPM and DY into the category of low.
In this model adjusted R Square is 0.779. Researchers chose the value of
LIST OF CONTENTS
COVER PAGE OF LOGO ............................................................................................ i PAGE OF TITLE ............................................................................................ ii PAGE OF APPROVAL GUIDE..................................................................... iii PAGE OF LEGALIZATION.......................................................................... iv PAGE OF AUTHENTICITY STATEMENT................................................. v PAGE OF MOTTO................................................................................. vi PAGE OF DEDICATION.............................................................................. vii ACKNOWLEDGEMENT.............................................................................. viii ABSTRACT................................................................................................... x LIST OF CONTENTS.................................................................................. xi LIST OF TABLES......................................................................................... xiii LIST OF PICTURES.............................................................................. xiv CHAPTER I INTRODUCTION ......................................................................
1 A. Background of the problem.................................................................. 1
D. Puspose of the study ............................................................................. 6
E. Systematics of writing .......................................................................... 7
CHAPTER II LITERATURE REVIEW A. Literature Study ……………………. .................................................. 10 B. Theoretical Framework………..................………............................... 12 1. Stock …………………………………………………….. 12
2. Accounting information………………………………..... 14
3. Company financial performance........................................ 20
4. Financial ratio analysis....................................................... 21
C. Research framework............................................................................ 26
1. Variables............................................................................ 26
2. Data................................................................................... 27
D. Hypothesis............................................................................................ 28
CHAPTER III RESEARCH METODS A. Types of Research …..………….…..................................................... 33
B. Loc ation and Time of Research..……….………….............…............ 34 C. Population and Sample......................................................................... 34
D. Data Collection Techniques................................................................. 35
E. Measurement Scale.............................................................................. 35
1. Nominal scale.................................................................... 35
2. Ordinal scale..................................................................... 36
F. Definition of Concepts and Operational............................................. 37
G. Research Instrument............................................................................. 41
H. Analysis Tools..................................................................................... 42
1. Correlation ....................................................................... 42
2. Statistics .......................................................................... 43
3. Regression ........................................................................ 45
4. Classical assumption test .................................................. 47
CHAPTER IV ANALYSIS OF DATA......................................................... 52 A. Description of Research Object ....................................................... 52
1. Research overview ........................................................... 52
2. The steps to create research models.................................. 53
3. Measurement scale............................................................ 53
B. Analysis of Data............................................................................... 55
1. Empirical equation models............................................... 55
2. Statistics Test..................................................................... 56
3. Classical Assumption Test................................................. 61
4. Interpretation of Data........................................................ 67
CHAPTER V CLOSURE A. Conclusion......................................................................................... 77 B. Suggestions....................................................................................... 78 BIBLIOGRAPHY ATTACHMENTS
LIST OF TABLE Table I.1 (Research gap)..........................................................................
4 Table IV.1 (t test summary).....................................................................
56 Table IV.2 (Count result of F test)......................................... .................
57 Table IV.3 (Coefficient determination of TAT, PER, NPM, and DY)...
58 Table IV.4 (Main of regression tables)....................................................
62 Table IV.5 (Regression tables with TAT as dependent).........................
62 Table IV.6 (Regression tables with PER as dependent).........................
62 Table IV.7 (Regression tables with DY as dependent)..........................
63 Table IV.8 (Regression tables with NPM as dependent).......................
63 Table IV.9 (Data summary)..................................................................
63 Table IV.10 (Table of heteroskidastity test)..........................................
65 Table IV.11 (Results of regression with Durbin Watson)......................
66 Table IV.12 (Multivariate regression analysis)......................................
68 Table IV.13 (Average of companies financial performance) ................
74
LIST OF PICTURE Picture II.1 (Theoretical Framework)....................................................
25 Picture IV.1 (Classification of Companies Financial Performance)......
49 Picture IV.2 (Output viewer of regression standarized residual)..........
57 Picture IV.3 (Graph of Normal Plot) ....................................................
58 Picture IV.4 (Graph of Durbin Watson).................................................
64
CHAPTER I INTRODUCTION A. Background of The Problem Currently the Islamic economic system is growing very rapidly. Where
the system is no longer just an option but also a solution to the economic problems that arise. Islamic economics is study of the behavior of a Muslim in an Islamic society that is in frame with Islamic law (Rivai and Andi, 2009: 1). Islamic Economics is a system which can realize economic justice for all people. The development of an economic system can not be separated from the development of capital markets as a means of fresh funds for expansion provider company.
In accordance with the National Sharia Board Fatwa NO: 40 / DSN- MUI / X / 2003 on capital markets and the general guidelines for the implementation of Islamic principles in the capital market attention opinions of Ulama, among others:
1. The opinion of Ibn al-Mughni Qudamah in juz 5/173, [Beirut: Dar al-Fikr, without yrs] "If one of the two persons of association buy union partners, the law allowed because he bought the other party."
2. The Opinion Wahbah al-Zuhaili in Fiqh al-Islami wa Addillatuhu jus 3/1841: “with muamalah (conducting transactions over) shares may be legal, because the owner is a parner in the company’s shares in accordance
In this Fatwa is meant by:
One. Capital Markets is an activity concerned with public offering
and trading securities Public Company relating to the issuance of securities, as well as institutions and professions related to securities. Two.
The Issuer is the public offering. Three. Islamic securities are securities as defined in the laws and regulations in the capital market is a securities contract, the management of the company, and how publication meets the Sharia principles. Four. Shariah Compliance Officer (SCO) is a party or an officer of a company or institution that has received certification from the DSN-MUI in the understanding of the principles of Sharia in the Capital Market. Five. Shariah compliance statement is a written statement issued by the DSN-MUI against an Islamic Securities Exchange that it is consistent with the principles of Sharia. Six. Sharia principles are principles which are based on the teachings of Islam are decided by the DSN-MUI, well defined in this fatwa and in other related fatwa.
As in understood the stock market is an activity that is concerned with the public offering and trading of securities, public companies relating to securities in issue, as well as institutions and professions associated with these effects. Sharia prohibits transactions in which there are: one. Transaction prohibition of interest (riba), two. Speculation something that is not yet clear (bai'ul ma'dum), seven. Purchases for the hoarding (Ihtikhar), eight. Disseminate misleading information (Sutedi, 2011: 23).
Islamic capital market is part of the capital market, where the capital market in Indonesia is the Indonesian Stock Exchange which also oversees sharia division contained in Jakarta Islamic Index (JII). Thus, although in the one roof but the Islamic capital market given its own space to provide identity and not to be mixed with conventional capital markets. This is expected to be the reason for Muslim businessmen to enter the capital market because it has no clear separation. Perhaps the Muslim businessmen fear the system that there is no clear separation.
Capital market activity started since 1912 in Jakarta. Securities traded at that time it was a stock, bond fund company owned by the Dutch and the Dutch government-owned bonds, this activity stopped in the second world war. Entering the era of independence exchanges reactivated by the Indonesian government bonds issued in 1950. This is supported by the activation of the Emergency Law UU regarding exchange No. 13 years 1951 are then defined by UU No. 15 years 1952 (Sudarsono, 2003: 171).
If seen from the history of capital markets, capital markets in Indonesia alone has been established for a long time. Starting from 1950, However the Indonesian people are still not enough to have knowledge of and more of the outstanding funds and is expected to move the Indonesian economy with better again. Because unlike the banking, capital markets is a direct instrument to distribute of public funds to the real sector.
The capital market is one of the effective means of moving funds from the community to be directed to productive activities. Public funds into the capital market is a long-term funds. The government efforts to increase capital in the economy can be done through the capital market.
People who have excess funds, both domestic and public communities abroad can invest money in the capital market. Capital market has been growing it has a very important role for the economic development of a country (Sudarsono, 2003: 926).
Have not been enough studies that examines the company with sharia system. It is interesting because this study examined based on financial performance, while the Muslim businessman doing a business activity not only look based on the financial performance of a company.
But also something more religious.
Table 1.1
Research Gap Researcher Year Title Results Murtopo 2002 The influence of The effect of the panjaitan the company's company's financial financial performance as performance as measured by the measured by the time interest earned, time interest growth ratio, price- value of the stock price. Imron rosyidi 2002 The interrelatedness of finalcial performance with stock price, the study on 25 issuers and using four financial ratios as independent variables
.
Simultaneously all the financial ratios affect the stock price changes, while only partial debt-to- equity ratio has no effect .
Fiorentinus Hendri Indriarto 2005 Effect of dividend yield and price- earnings ratio for a company with low and high IOS
No effect of dividend yield and price-earnings ratio of the stock price for a company with a low or IOS IOS high. This means that the dividend yield and price- earnings ratio has no effect on stock prices for companies with low
IOS Dyah Ayu Savitri 2012 Analysis of the influence of ROA,
NPM, EPS, and PER on stock returns
There is an increased return of shares in the company on the list of research with the assumption ROA, NPM, EPS, and PER unchanged. To ROA does not have a positive and significant effect on stock returns while NPM there are positive and not significant to stock return, and EPS and manufacturing sector, food and beverages. Eka Restu Yuliawati 2013 Effect of the dividend per share, return on equity, net profit margin, stock liquidity, and growth in sales of the shares
Dividend Per Share, Return on Equity, Net Profit Margin, Liquidity Shares and Sales Growth positive effect on stock price changes
Source: (Megarini, 2003: 25-27) The table above is the title and the results of previous studies, which has included the study of the relationship between financial performance and stock price. As a reference the researchers to take title An Analysis of the Financial Performance Effect of Sharia Companies on Stock Price Changes ( a Case Study of Companies Listed on the Sharia Stock Listing).
B. Formulation of The Problem
1. How does the financial performance of companies listed on the Stock Exchange of Sharia?
2. How is change of the prices in sharia stock exchange?
3. How the influence of the sharia companies financial performance, with individually and simultaneously to changes in stock prices?
4. The ratio which the most dominant influence the stock price changes sharia companies listed in List of Islamic Securities?
C. Objective of The Study
1. To determine the financial performance of companies listed on the Stock
3. To find the influence of the sharia companies financial performance, with individually and simultaneously to changes in stock prices.
4. To find the ratio which the most dominant influence the stock price changes sharia companies listed in List of Islamic Securities.
D. Purpose of The Study
Theoretically, the results of the implementation of this study is expected to provide a common use:
1. For researchers The results of this study can provide knowledge for researchers. In particular to look for information about the performance Effect on stock price movements. As well as well as a requirement for graduation courses S1 Islamic banking STAIN Salatiga.
2. For development of science The results of this study can be used as a source of information for further research on the influence of performance related to changes in stock prices.
3. For students This study is expected to be a reference, for the development of science, as well as subsequent studies. To continue studying and further research is expected to develop the findings of this study have been examined.
E. Systematics of Writing
This graduating paper is divided into five chapters, to facilitate the reader to examine the contents of this graduating paper. As for systematics are as follows:
1. The first part of this graduating paper consists of graduating paper cover, page of logo, page of motto and dedication, page of title, page of conselor agreement, page of legalization examinated, page of authenticity statement, abstrack, list of contents.
2. Part of the contents of the graduating paper
a. Chapter I Introduction This chapter discusses the background of the problem, objective of the study, benefit of the study, and systematics writing.
b. Chapter II Literature Review This chapter contains a summary of literature review, literature study, research framework, hypograduating paper.
c. Chapter III Research Methods Contains a research genre, the location and time of the study, population and sample, data collection techniques, measurement scale, definitions and operational concepts, research instrument, test instrument research, analysis tool. e. Chapter V Closure Contains a conslusion and suggestion from the researcher, as the results of study.
3. The Final Part Contains a bibliography, attachments , and authors curriculum vitae.
CHAPTER II LITERATURE REVIEW A. Literature Study Many researchers have done research on the company's financial performance include Rosyidi (2002) mentioned in Megarini (2003). Examining the performance of spatial association with stock prices, the study
on 25 issuers and using four financial ratios as independent variables. The financial ratios is earnings per share, return on assets, debt to equity ratio, and the nett profit margin. Research results are simultaneously all financial ratios that affect the stock price changes, while only partial debt to equity ratio which had no effect.
Megarini (2003) examines the financial performance of the analysis of the effect of stock price changes on manufacturing companies listed in Jakarta Stock Exchange. Using seven financial ratios as independent variables. Financial ratios used are the current ratio, total asset turnover, operating profit margin, return on investment as, debt to equity ratio, total debt to total equtiy ratio, and price earnings ratio. Research results are only current ratio and operating profit margins have positive and partial effect on stock prices.
Savitri (2012), Researching on the "analysis of the influence of ROA, NPM, EPS, and PER on stock returns. The results showed that an increase in the stock returns of companies included in the list of research with the positive and not significant to stock return, and EPS and PER has a positive and significant effect on stock returns of manufacturing sector, food and beverages.
Indriarto (2005), research on "the Effect of the Dividend Yield and Price Earnings Ratio for a Company with Low and High IOS. test results showed that there was no effect of the dividend yield and price-earnings ratio of the stock price for a company with a low or IOS IOS high. This means that the dividend yield and price-earnings ratio has no effect on Stock Prices for companies with low IOS.
Yuliawati (2013) studied “the Effects of Dividend Per Share, Return on
Equity, Net Profit Margin, Liquidity of Shares and Sales Growth Against Shares". Results of the study was the Dividend Per Share, Retrun on Equity, Net Profit Margin, Liquidity Shares and Sales Growth positive effect on stock price changes.
Panjaitan (2002) studied “the Effect of the Companies Financial
Performance as Measured by the Time Interest Earned, Growth Ratio, Price Earnings Ratio and Market to Book Value of the Stock Price
”. Results from these studies is merely the Price Earnings Ratio and Market to Book Value just having a significant effect on Stock Prices. While testing the regression coefficients simultaneously affect the stock price.
From some research on the above, all researchers doing research on a this study discovered new facts about the influence of financial performance, the price of shares in the sharia companies. With more independent variables and varied, this research is expected to get more specific results from previous studies.
B. Theoretical Framework
1. Stock
a. Definition Shares are securities ownership in a business / company, which claims to income and access to the business or company. The issuance and sale of shares to the public is one way the company to raise funds in the financing company activities (Manurung, 2009: 5).
b. Type of stock According Harmono (2009: 62) there are two types of shares in general that: 1). Preferred stock
Preferred stock is a stock that has the characteristics of a combination of common stock and bonds. Kinds of preferred stock include:
a). Convertible prefered stock: common stock can be changed to suit the specified exchange ratio.
b). Callable preferres stock: the right to buy back shares from c). Dividend in areas: distribution of dividend rights include the undistributed past.
d). Floating or Adjustable-rate Preferred stock (ARP): dividends paid floating American innovation. Popular for short-term investments of excess cash. 2). Common stock: if the company only issued one share class only, usually common stock which has the right to its holder.
c. Stocks value According Harmono (2009: 56) stocks ratings of securities can be broken down into several different types of stock value, there are 7
(seven) types as follows: 1). Per value : The value of obligations stipulated for each share, its importance with regard to the law.
2). Additional paid in capital : differences in pay with their nominal value.
3). Paid in capital : total paid by the holders of common shares or preferred.
4). Retained earnings: partially undistributed profits to shareholders to be implanted back into the company.
5). Book value: shows the net assets owned by the shareholders by having one share.
7). Intrinsic values or fundamental values: the actual value of the shares. determining the fundamental value, there are two commonly used approaches that use fundamental analysis of financial data, such as profits, dividends, sales, and so on; while the technical analysis using market prices.
d. Stocks price The stock price is the point of equilibrium price on the stock, which is the result of a mechanism that occurs between the seller and the buyer in the stock market.
According to Brigham and Houston (2010: 7) in Yuliawati (2013) "determine the share price shareholder wealth translates to maximizing stock price. the price of the stock at any one time will depend on the expected cash flows received in the future by investors "average" if investors buy the stock.
2. Accounting Information This study takes a case study on the financial performance of the stock price changes. Where the financial performance as the independent variable is related to the accounting information. Where the information is very important in making a decision, whether conducted by individuals and organizations in the business. Accurate information will result in better decisions. a.) Information referring to the data, the term information indicates facts or data obtained during the act of communication takes place. In this view, information is conceptualized as a physical quantity that can be moved from one point to another, from one medium to another medium.
b). Information refers to the meaning of the data, the term information indicates the meaning of the data. Thus, according to this view different information from the data. information is the meaning, purpose, or meaning of the data contained (Ol2, 2007: 22).
2). Type of information In Harahap (2007) is divided into two types of information, namely:
a) Quantitative information
b) Qualitative Information 3). Quality of information
In Harahap (2007) the quality of information must have a minimum of seven (7) the nature, namely: a) Accurate
b) Reliable
c) Complete (deep)
d) Right on time
e) Relevant b. Accounting 1) Definition
Viewed from the angle of the wearer, the accounting can be defined as a discipline that provides the information necessary for implementing activities efficiently and evaluate the activities of an organization. Accounting terms of the process of activity, accounting can be defined as "the process of recording, classifying, summarizing, reporting, and analyzing financial data of an organization" (Joseph, 2005: 4-5).
According to the committee of the American Institute of Ceritified Public Accountant (AICPA) defines "Accounting is the art of recording, classifying and summarizing in a certain way and in a monetary measure, transactions and events are generally of a financial nature and includes interpreting the results". (Harahap, 2007: 59).
Generally it can be said that the accounting is actually an art, a science, a system in which information regarding the recording and classification by means of fitting in units of money on transactions and events which at least partially have a financial nature. As well as their interpretation of the registration data and presented in the financial statements (Taswan, 1997: 5).
2) Accounting Principles According Taswan (1997) There are 6 Accounting principles, namely:
a) The Principle of Acquisition Price In principle it is emphasized that the assets, liabilities, capital income should be recorded at cost, which is agreed upon by both parties. The use of this principle is based on that price is determined objectively, the number had known and verifiable by the evidence of the transaction. Measurement of historical prices is through the amount of cash or its equivalent.
b) The Principle of the Realization of Income The principle of the realization of income basically includes the income, income measurement and recognition of income. Income is any increase in assets or decrease in debt arising from the sale of goods or services during a given accounting period. Measurement of income can be determined by the amount of cash or equivalents, total assets were received, and the amount of debt reduction. Then the recognition of income in principle based on the realization of income. Realization of income can be determined based on that the goods / services have been provided and the number is already known.
c) The Principles of Bring Together the Opinions and Fees statements is the result in the same period. Revenue and expenses should something happen in the same period. To be able to bring revenues and expenses in the same period, the required method of revenue recognition and the recording of the cost. In principle this brings a need to use basis (accrual basis) in terms of the emergence recognize revenue and cost. This time base applies for companies manufacturing and services. Only enforcement adapted to the characteristics of the company.
d) The Principle of Objective That the financial statements of a company / bank must be prepared on accounting data that is supported by objective evidence. Objective evidence can be obtained if such evidence is the result of an agreement between the parties to a transaction and supported by supervision and good internal control system.
e) The Principle of Full Disclosure Financial statements should be able to provide all the information both qualitative and quantitative interpretation which may affect the decision-making users. To achieve this principle, the financial statements must be prepared properly in accordance with agreed standards, using appropriate terms, providing additional records, provide attachment, footnotes, and etc. f) The Principle of Consistency This principle basically says that those statements only have comparability. This comparability to similar companies in different periods or in different companies for the same period. The comparability of the financial statements will be determined by the consistent use of the theory, methods, basic, guidelines and accounting practices similar to those applied previously. Consistency is not a fixed price, which means that in certain cases, for example there is a method that does not match the current conditions, then the company can replace these methods should be explained about the changes as long as the methods and effects of changes in the method of the figures in the financial statements.
Accounting information will be aesthetically and portrayed in the financial statements (Annual Report) of a company. Every company is required to issue financial statements. Financial statements describe the financial condition and results of operations of a company at a certain time or a certain time period. The type of financial statement that is commonly known are: Balance Sheet or Profit / Loss, Or Results of Operations, Statement of Cash Flows, Statement of Changes in Equity / Financial Position (Harahap, 2007: 105).
1. Providing information about the financial position, performance and cash flows of companies that benefit the majority of users report in order to make economic decisions.
2. As well as showing responsibility/stewardship management over the use of resources entrusted to them.
Parties are involved in the formulation of accounting principles and believes that the financial statements are prepared and presented by the company in general will meet the needs of users of financial statements in making economic decisions, such as: a. To decide when to buy, sell or store their securities in the form of shares or other securities.
b. Assessing the quality of corporate management accountability.
c. Assessing the ability of the company to pay wages / salaries and benefits / other facilities to its workforce.
d. Determining the profit expectations are able to be obtained and distributed (dividends) by the company.
e. Assess the safety on lending to companies.
f. Determining taxation policy and so forth.
3. Company Financial Performance The financial performance of the company is part of the company's overall performance. Financial performance picturing of financial distribution of funds that can be measured by indicators of capital adequacy, liquidity, profitability, and liquidity (Jumingan, 2006: 239).
The company's performance is generally measured by net income (profit) or as the basis for other measures such as investment in return (Return on investment) or earnings per share (earnings per share). Elements that are directly related to the measurement of net income (profit) is income and expenses, and hence also the income (profit), depending in part on the concept of capital used by the company in the preparation of financial statements (Harmono, 2009: 23).
4. Financial Ratio Analysis Financial ratio analysis can be classified into five aspects of the company's financial ratios, namely: likudiditas ratios, activity ratios, profitabilitass ratio, solvency ratio (leverage ratio), the ratio of enterprise value (Harmono, 2009: 106).
According to Weston and Brigham in Jumingan (2006). Make more categories, namely as follows: (1) The ratio of liquidity, aims to measure the company's ability to meet its short term obligations.
(2) The ratio of activity, aimed at measuring the effectiveness of the company in operating funds. For example Inventory turnover, average collection period, total assets turnover, and so on.
(3) The ratio of profitability, aimed at measuring the effectiveness of management is reflected in the results of the investment rewards through sales activities. (4) The solvency ratio (leverage ratio), aims to measure the extent of the company's financial needs in using the loan funds.
(5) Ratio of growth, aims to measure the company's ability to maintain its position in the growth of the economy and industry.
(6) Ratio of valuation, aimed at measuring the performance of the company as a whole, as this ratio is a reflection of the risk ratio and the ratio of yields. Financial ratios are designed to show the relationships between items in the financial statements (balance sheet and income statement)
(Atmaja, 2003: 415). According to Lukas Setya Atmaja (2003) there are five types of financial ratios : (1) Leverage ratios, showing some of the debt used by the company.. (2) Liquidity ratios, measures the ability of the company meet maturing obligations.
(3) Efficiency or turnover or asset management ratios, measuring how effectively the company manages its assets.
(4) Profitability ratios, measures the company's ability to generate profits.
Based on the description above financial ratios. I use 8 financial ratios represent from 5 types of financial ratios which have been mentioned earlier, namely: debt ratio, current ratio, inventory turnover ratio, total asset turnover, net profit margin, return on equity (ROE), price earning ratio (PER), and dividend yield.
1. Debt Ratio (DR) Debt ratio is a ratio used to measure the proportion of funds from debt. The lower the better. to measure this ratio using the following formula:
Total Debt
Debt ratio =
Total Assets
(Atmaja: 2003, 416)
2. Current Ratio (CR) Current ratio is one of the instruments for measuring the liquidity ratio. This ratio is based on a simple comparison between the total current assets and current liabilities. Current assets are illiquid amount of property, such as cash, marketable securities, accounts receivable, and inventory. While current liabilities are generally short-term debt and long-term debt maturing this year. to measure this ratio using the following formula:
(Atmaja: 2003, 416)
3. Inventory Turnover Ratio (IVT) Inventory turnover ratio is a ratio to measure inventory turnover. This ratio is a type of financial ratios to measure the effectiveness of the company to manage the assets they have. The higher level of effectiveness of the company to manage its assets, that more better. To calculate the inventory turnover ratio used formula: selling
Inventory turnover ratio = inventory (Atmaja, 2003: 416)
4. Total Asset Turnover (TAT) Total asset turnover is a financial ratio, to measure the effectiveness of the use of all assets. to measure this ratio using the following formula: selling
Total asset turnover = total assets (Atmaja, 2003: 417)
5. Net Profit Margin (NPM) Net profit margin is a financial ratio, to measure the division's net profit after tax to sales. The higher this ratio, the more profitable a company. To measure this ratio using the following formula:
Total asset turnover = selling total asset
(Atmaja, 2003: 417)
6. Return on Equity (ROE) Return on equity is a financial ratio, to measure the profitability of the net profit after tax to equity. To measure this ratio using the following formula:
Return on equity = Net profit after tax own capital
(Atmaja, 2003: 417)
7. Price Earning Ratio (PER) Price earnings ratio is a financial ratio, to measure the market value of the stock price to earnings per share. To measure this ratio using the following formula:
Price earning ratio (PER) = stock price Earnings per share
(Atmaja, 2003: 417)
8. Dividend Yield Dividend yield is a financial ratio that is a kind of market value ratios, which kind of ratio is kind of ratio to measure how the company is assessed by investors in the capital market. To measure this ratio using the following formula:
Dividend yield = dividend per share stock price
(Atmaja, 2003: 417)
C. Research Framework Picture 2.1
Theoretical Framework
1. Variables Company Financial Performance: 1.
debt ratio 2. current ratio 3. inventory turnover 4. total asset turnover 5. net profit margin 6. return on equity 7. price earning ratio 8. dividen yield
Changes in Stock Prices Dependent Variables Independent Variables information about it, then drawn the conclusion (http //: www.mushlihin.com, accessed on 20 November 2014). The variables are divided into two, namely:
a. Independent variables are variables that affect or be the cause of the change or the emergence of Dependent variable (dependent variable).
So named because it is freely variable in influencing other variables, hence called independent variables (http //: www.mushlihin.com, accessed on 20 November 2014).